Today is Independence Day, and a US Public holiday. But did you actually know that the legal separation of the thirteen colonies from Great Britain in 1776 actually occurred on July 2? Things will be quiet from a market perspective, except in the UK where we have an election - so there will be a focus on GBP. Cable opens at 1.2750.
To give some colour about the election process, there are 650 seats in the UK’s parliament. So, for a majority a party needs 326 seats - in practice it is a little less because a number of members, such as the Speaker, do not vote. Polls are typically showing Labour’s majority will be around 100 seats. In 1997, Tony Blair won 418 seats for a 179-seat majority. Back then, the Conservatives went into the election a seat short of a majority. This time round the Conservatives had a 40-seat majority at the point parliament was dissolved, holding 345 seats against the aggregate of all the other parties of 305 seats. Hence, 2024 could see Labour hold more seats than under Blair and see a greater swing in its favour - the red wall is coming.
Marketwise, the Minutes from the Fed’s June policy meeting showed officials were awaiting evidence that inflation is cooling and were divided on how long to keep rates elevated. The yield on 10-year Treasuries was little changed, at 4.36%. West Texas Intermediate crude fell 0.7% to $83.31 a barrel, Bitcoin fell 1.2% to $58,854.26, Ether fell 1% to $3,222.71, and equity markets continue to make further all-time highs.
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