FUNDAMENTAL REVIEW FOR THE WEEK (8 - 12 July 2024)

Kazakhstan - no trading
Eurozone - Sentix Investor Confidence (July) - 13:30
USA - consumer inflation expectations (June) - 20:00

The week opens against the backdrop of Marine Le Pen's loss in the parliamentary elections in France. The victory was won by the coalition of the left party “New Popular Front”, receiving 182 seats in the National Assembly of the country. The party of the current French President Emmanuel Macron, Together, took 2nd place in the elections, receiving 168 seats in parliament. The top three was completed by Marine Le Pen’s far-right National Rally party. It will take 143 seats in the lower house of parliament.

Overall, local positive for the euro, but Marine Le Pen said she will be back soon, and nothing good is expected economically, so the positive effect of the “soft” results of the choice in France is likely to be short-lived. But there is still little positive for the growth of the dollar itself - the echo of weak nonfarm should be heard even after the weekend.

As for the coming week, it will focus on two main events: Federal Reserve Chairman Powell's speech to Congress and the release of US inflation data for July.

Powell is expected to talk about the slowing US economy and a possible Fed rate cut in September due to disappointing economic reports, especially on non-farm payrolls, the aforementioned non-farm payrolls.

Investors will be closely monitoring Powell's statements for any changes in rhetoric regarding the economy, labor market and inflation. After Powell's speech, attention will turn to US inflation reports for June, with an emphasis on month-on-month inflation growth.

Given the slowing economy, inflation is unlikely to rise significantly, but it remains an important factor. If inflation continues to decline, especially in key sectors such as services and housing, Fed members could begin signaling rate cuts in September. For the American currency, this could act as a rather significant medium-term bearish factor for decline.