This article first appeared in The Edge Malaysia Weekly on July 1, 2024 - July 7, 2024

This week, France and the UK will be having their general elections, which could shake the financial markets of Europe’s two largest economies.

The first week of July will also see a slew of important macroeconomic data coming out of China and the US.

On June 30, France had the first round of elections for the lower house of the National Assembly, while the second round will take place on July 7.

Marine Le Pen’s far right National Rally Party and its allies continued to solidify their lead in the race, according to Bloomberg’s poll of polls, with 36.2%, while the leftist New Popular Front alliance came in second with 28.3%. President Emmanuel Macron’s Renaissance and its centrist allies were trailing in third place.

Following the dissolution of the National Assembly by Macron earlier this month, the European bond market saw a rout that wiped almost US$200 billion (RM943.5 billion) off the value of stocks.

In the UK, a general election is set to take place on July 4. According to Bloomberg’s poll of polls, which tracks a 14-day rolling average using data from 11 polling companies, Prime Minister Rishi Sunak’s incumbent Conservative Party continued its slide in popularity, plunging to 20.2%. The opposition Labour Party’s popularity rose slightly to 41.2% as of June 26.

Although politics could be taking the spotlight in Europe’s largest economies, conversations over the eurozone’s monetary policy continue. Between July 1 and 3, the European Central Bank’s (ECB) Forum on Central Banking 2024 will be held in Sintra, Portugal, titled “Monetary policy in an era of transformation”. The forum will see a panel discussion by ECB president Christine Lagarde, US Federal Reserve chair Jerome Powell and governor of Banco Central do Brasil Roberto Campos Neto on July 2.

The Fed will release its June Federal Open Market Committee (FOMC) minutes on July 4, followed by the ECB’s release of the Account of June Policy Meeting on the same day.

On July 5, Bank Negara Malaysia will release international reserves as at June 28, which is expected to garner more attention than usual after the central bank’s use of currency forwards to manage short-term pressures on the ringgit made headlines recently.

The country’s international reserves totalled US$114.1 billion as at June 14, up from US$113.6 billion as at end-May.

Meanwhile, the heated debate in parliament is going to continue this week.

Over in China, its manufacturing Purchasing Managers’ Index (PMI) is forecast to stay unchanged at 49.5 in June from May, while the non-manufacturing index may ease a little to 51 from 51.1 a month ago, according to a Bloomberg survey

“The manufacturing PMI may edge higher but stay in contraction at below 50, indicating that the industrial sector remains a key drag on the outlook in June. The non-manufacturing PMI is likely to continue in expansion with the pace expected to be similar to May’s.

“That said, the private sector Caixin PMI, which focuses on smaller, private and export-oriented companies could continue to outperform the official PMI but may be less indicative of the China’s recovery pace based on other high frequency data,” states UOB Global Economics & Market Research in a June 28 note.

China’s Caixin June manufacturing PMI is set to be released on July 1, while the June services PMI will be out on July 5.

Other Asian countries will also release a slew of economic and inflation data this week, starting with South Korea June trade data on July 1. On the same day, Indonesia will release its June Consumer Price Index (CPI) data, which is expected to moderate to 2.7% year on year, from 2.84% in May. This will be followed by South Korea’s CPI data on July 2.

The Singapore Urban Redevelopment Authority’s private residential property price index for the second quarter will be released on July 1, followed by the city state’s official PMI for June on July 2 and the S&P Global Singapore PMI for June on July 3.

On the local corporate front, three companies, namely UUE Holdings Bhd, Go Hub Capital Bhd and Ocean Fresh Bhd are set to be listed on the ACE Market of Bursa Malaysia on July 2, 3, and 4 respectively.

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