The upcoming UK general election on Thursday has sparked discussions about potential changes in government and their impact on businesses and the economy. Labour's approach to business, including a review of business rates, closer relations with technology firms, and promises of stability, has garnered attention. Analysts in the City of London believe that a potential Labour landslide victory could boost the pound, shares, and investment in the UK, positioning the country as a "safe haven" for investors amidst global political turmoil. Conversely, the Conservative party has warned of the economic risks associated with a large Labour majority. The stability in sterling and gilts prices leading up to the UK election suggests investor confidence in potential Labour policies. Meanwhile, the French elections and the possibility of extreme left or right leadership have raised concerns among investors, with potential implications for government bonds. The impact of Liz Truss's past actions on UK markets is also a point of consideration. In the financial markets, the USD Index declined, while GBP/USD rose to three-week highs in anticipation of the UK elections. The ECB's publication of its June meeting accounts and the S&P Global Construction PMI are expected to influence market movements. Additionally, the US stock markets were closed in observance of Independence Day, contributing to the focus on the UK elections. Overall, the potential outcomes of the UK and French elections, as well as their implications for businesses and financial markets, are subjects of significant interest and analysis.
