Headlines:
- Dollar in charge to kick start December trading
- Euro falls as French political quagmire weighs
- French government makes further concessions to appease Le Pen's far-right party
- Weekly update on interest rate expectations
- ECB's Lane: At some point, monetary policy needs to be driven by upcoming risks
- ECB's Kazāks: In my view, rate cuts must continue
- ECB's Kazāks: We are likely to discuss bigger rate cut in December but uncertainty is high
- PBOC governor Pan says will maintain supportive monetary policy stance for next year
- Italy Q3 final GDP 0.0% vs 0.0% q/q prelim
- Eurozone October unemployment rate 6.3% vs 6.3% expected
- Eurozone November final manufacturing PMI 45.2 vs 45.2 prelim
- UK November final manufacturing PMI 48.0 vs. 48.6 prelim
- UK November Nationwide house prices +1.2% vs +0.2% m/m expected
Markets:
- USD leads, EUR lags on the day
- European equities higher; S&P 500 futures flat
- US 10-year yields up 0.2 bps to 4.195%
- Gold down 0.5% to $2,641.09
- WTI crude up 1.2% to $68.82
- Bitcoin down 2.2% to $95,063
The dollar is off to a good start to the new month, helped by more of Trump's tariffs threat as he warns the BRICS on divesting away from the greenback. The news came over the weekend and aided with dollar gains today, alongside fresh flows upon the turn of the month.
The greenback held higher throughout the session but saw gains against the yen chipped away. USD/JPY was keeping around 150.55 earlier before moving back down to near 150.00 currently - still up 0.2% on the day. That might owe to Treasury yields initially on the up before keeping little changed again now.
But against the rest of the major currencies bloc, the dollar is sitting comfortably higher. The euro moved down as French political concerns weighed. The government failed to appease Le Pen's far-right party on budget talks and that is risking a no confidence motion. The later news is that they are to make concessions to avoid that but the far-right have said there are still "red lines" that needs to be addressed.
EUR/USD fell to a low of 1.0496 but is keeping around 1.0510 currently, down 0.6% on the day. Besides that, GBP/USD is down 0.4% to 1.2685 and USD/CAD up 0.3% to 1.4040 at the moment. The antipodeans are also struggling as the dollar breaks out against the Chinese yuan, with USD/CNY rising to its highest since July. AUD/USD is down 0.5% to 0.6480 at the lows currently.
Elsewhere, European indices were off to a poor start with French stocks lagging but recovered during the session. The DAX even raced to a fresh record high, continuing to defy its ties to the German economic outlook. US futures were more muted though but are keeping flattish after being softer earlier in the day.
In the commodities space, gold is down amid a stronger dollar to start one of its best seasonal months. Meanwhile, oil is up a little over 1% with the focus turning towards the OPEC+ meeting later in the week.
