Good morning. It's July 8, and fittingly, marks the founding of Paris circa 250 BC.
Recap of key elections in the UK (July 4), Iran (July 5), and France (July 7):
- As expected, the Labour Party led by now-Prime Minister Keir Starmer dominated at the polls in the July 4 UK general election, winning 412 of the 650 seats in the House of Commons and returning to power for the first time since 2010. UK equities and the pound held steady as Starmer took the reins at Number 10.
- In a somewhat unexpected outcome, low-profile lawmaker and reformist candidate Masoud Pezeshkian won Iran's July 5 presidential runoff, defeating hardliner and religious establishment favorite Saeed Jalili. Note that "reformist" is a relative term – the true levers of power for major domestic and foreign policies rest with Supreme Leader Ayatollah Khamenei. Pezeshkian could have an opportunity, however, to move the needle on domestic social issues in Iran like women's rights and increased engagement with the United States. Analysts predict Pezeshkian's win will have a negligible effect on global crude oil prices.
- In a major upset, France's left-wing coalition, the New Popular Front (NFP), won the most seats (projected 172-192 in the 577-seat National Assembly) in the second round of the country's snap parliamentary election on July 7. It's too soon to tell if French President Macron's political gamble to call snap elections was worth it, though his Ensemble coalition won the second-most seats with a projected 152-158 seats. The biggest shock was the ultranationalist, far-right National Rally and its conservative allies placing third with a projected 132-152 seats. National Rally was expected to win the most seats, and potentially form a government, after drawing one-third of all votes in the first round on June 30. As fears of a far-right government subside, anxiety is building regarding the prospect of a hung parliament as no coalition won an outright majority to form a government. Legislative gridlock would likely impede the budget process and could limit France's influence within the European Union. If the leftists are able to form a government, analysts are bracing for increased spending and higher deficits.
Elsewhere, Washington, DC hosts the NATO Summit this week, July 9-11. In addition to the leaders of all 32 NATO members, Ukrainian President Volodymyr Zelensky plus leaders from Australia, Japan, New Zealand, and South Korea will attend. President Biden will seek to affirm the United States' position as the center of gravity for security in Europe and the Indo-Pacific, though brewing consternation among Democrats and the status of his presidential campaign could overshadow the summit's agenda.
Upcoming Global Elections
There are no major global elections this week. The next scheduled elections are:
July 15: Rwanda general election
July 28: Venezuela presidential election
Selected Central Banking Events
July 8: Eurogroup meeting (informal meetings of eurozone finance ministers)
July 9: Federal Reserve Chairman Jay Powell testifies to the Senate Banking Committee on “The Semiannual Monetary Policy Report to the Congress."
July 10: Federal Reserve Chairman Jay Powell testifies to the House Financial Services Committee on “The Semiannual Monetary Policy Report to the Congress," Reserve Bank of New Zealand monetary policy meeting
Selected Economic Indicators
