The week kicks off with a reasonably strong macro and market backdrop. Global stocks hit a record high last week and wrapped up the quarter with a 2.4% gain, marking the sixth rise in the last seven quarters. Over here in Asia, stocks surged by 5.5% in Q2.Inflation figures from the U.S. on Friday played nice with relatively benign expectations, keeping the ‘soft landing’ narrative intact and leaving room for two quarter-point rate cuts from the Fed this year. Will the first of these cuts come before the November presidential election? Stay tuned.However, the bullish momentum shows signs of fatigue, especially in Big Tech. Across the markets, pockets of uncertainty and volatility are cropping up like unwelcome weeds in a well-tended garden. In the currency world, the Japanese yen plays the part of the dramatic actor, plunging to a 38-year low against the dollar last week. Despite these ups and downs, the market’s narrative remains intriguing. It’s like a blockbuster series with enough plot twists to keep us all guessing.In the days ahead, headlines will buzz with the results of the first-round legislative ballot in France, the general election in the UK, and Joe Biden’s future at the top of the Democratic ticket in the US.France saw a record turnout for the first of two votes to determine parliamentary representation. Marine Le Pen’s National Rally (RN) is poised to make significant gains. The question is whether RN can secure a majority and compel Emmanuel Macron to appoint Jordan Bardella as prime minister. Over in the UK, the Tories are on the brink of what many describe as an existential wipeout. The swing to Labour might be the largest in history, leaving the Conservatives reeling.President Biden seems to be grappling with increasing scrutiny over his cognitive health, which some describe as sundowning syndrome. This situation has become a critical concern for the Democratic Party. The outcome of the Democratic ticket might hinge on whether the First Lady can persuade Biden to step aside. Many view her as the only person who could effectively convince him to relinquish his candidacy, especially after a debate performance perceived by some Democrats as poor enough to jeopardize their chances in the election.Democrats face a conundrum as they contemplate potential replacement scenarios for President Biden. The fear of replacing him is as daunting as keeping him on the ticket. California Governor Gavin Newsom, a potential candidate, carries the baggage of California’s politics. In a match-up with Trump, his association with the state could become a PR liability, reinforcing blue-state stereotypes and possibly energizing a larger red turnout.Meanwhile, Vice President Kamala Harris, once seen as a promising torchbearer, has seen her favorability plummet, arguably even more than Biden’s. This leaves the Democratic Party in a precarious position, with limited appealing alternatives.Amid the political drama, a slew of economic narratives awaits attention. Top-tier data from the world’s largest economy will be released, with economists predicting the addition of 190,000 jobs in June for the NFP headline. These forecasters, often likened to drawing numbers out of a hat, will be scrutinized to see if their projections align with reality this time. The job data will be a crucial indicator of economic health and will influence market movements and policy decisions.As we gear up for the week ahead, it’s clear we’re in for an economic rollercoaster peppered with fireworks of data and a dash of holiday scheduling chaos. Jobless claims are coming in hot a day early on Wednesday, right after ADP’s private payroll predictions for June. And if that’s not enough to keep us on our toes, we’ve got the June FOMC minutes dropping mid-week.But here’s where it gets interesting: July 4th lands smack on a Thursday. That means trading desks might resemble ghost towns around the release of the Non-Farm Payrolls (NFP) report on Friday morning. The holiday timing adds a twist to trading the jobs report. With many taking off for a five-day weekend, Monday’s comeback could either confirm the market’s initial reaction or throw it for a loop.In other words, buckle up—this week’s economic ride might be this year’s wildest one yet if the headline NFP prints toward the low end of 100,000, and perhaps not an outcome favouring stocks.More By This Author:PCE Data Takes A Backseat As Debate Fallout Resonates Globally
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