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  • richard evans

Labour are in and it's raining. Looking forward to nonfarms and weekend sport

Good morning


Well it’s no surprise that headlines are focussed on Labour’s landslide victory in the general election.  The turnout was pretty low, whether that is down to general political apathy in the UK, or whether it is because regular Tory voters couldn’t bring themselves to vote for Conservatives or anyone else this time, I’m not sure, but its disappointing that so many people chose not to exercise their right to vote. 


Not much I can add that the papers haven’t covered but the highlights for me are that Farage has become an MP for the first time, while his party Reform have won just four seats despite winning over four million votes, making them the third largest party by votes, ahead of LibDems.  Most of those votes are taken from the Conservatives, indeed UBS report that in many constituencies the combined Tory and Reform vote totals were greater than Labour.  Labour won’t mind.  The unbearable George Galloway lost the Rochdale seat he won a few months ago, and SNP have lost a huge 38 seats in Scotland leaving them with just nine.  I am not Scottish so should have no real comment on the political situation up there, but SNP have hardly showered themselves in glory up there in recent times.


We will have the French elections this weekend, I’ve mentioned before that parties are working hard to block Le Pen’s National Rally (RN) party winning enough votes to form a government.  Many candidates are withdrawing to allow their political rivals a greater chance of winning votes.  There is a possibility that a coalition could be formed from parties other than far right and far left.  Meanwhile in the US some donors are warning they will withdraw party funding unless Biden steps down. 


So, to the currency markets.  US dollar is slightly weaker across the board with GBPUSD at 1.2770, EURUSD 1.0825 and USDJPY slipped below 161.00 to hit a low of 160.55 overnight, now 160.75.  No sign of the intervention that I thought we may see given the less liquid markets over the US holiday.  Today we have the all-important US nonfarm payrolls.  Last month we got a much larger than expected headline at +272k against an expected +175k.  This time a headline around +190k is expected, risks I think this time are to the downside, I have seen a couple of banks looking for a lower headline.  If they are right we must surely see USD weaken into the weekend. 


If so, recent highs in GBPUSD of 1.2860 back in mid-June and 1.2890 in March could come under pressure, which would put us on track to test highest levels for almost one year.  In EURUSUD a break of 1.0900 will open up higher levels but with the French political situation I can’t see us getting to 1.1000.  Of course, we could get another surprise increase as we did last month, which would push USD back to levels seen in late June/early July, GBPUSD around 1.2670 and EURUSD 1.0715.  It’s a tough one to call so we’ll just have to sit and wait.


Plenty of sporting action to get our teeth into this weekend, just as well given the rather miserable wet and cold weather we’ve woken up to this morning.  Lets start with the Euro’s, tofay sees the quarter finals between Spain and Germany and then Portugal v France.  A couple of crackers there.   England take on Switzerland tomorrow.


Before then, England rugby players take on the mighty All-Blacks tomorrow morning.  All-Blacks are favourites but they are going through something of a period of change, so England may just pull off a bit of a shock.  Currently 4-1 if anyone is interested although I would always find it difficult to bet against New Zealand unless they were playing South Africa.  Should be an interesting match anyway. 


I’ve always found it difficult to really get into tennis but for those who enjoy the sport, Wimbledon is still in full swing.  Of course, it’s likely to be affected by rain over the weekend, as will the British Grand Prix at Silverstone.  I do feel sorry for the fans who are camping there.


Have a great weekend as and when it arrives.  I hope it stays drier where you are, if not just settle down in front of the TV for the rugby, football, tennis and F1.  There are worse ways to spend a weekend…



-  10.00 EU retail sales

-  10.40 Feds Williams speaks

-  13.30 US nonfarm payrolls

-  13.30 CAD unemployment

-  15.00 CAD Ivey PMI


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