US Futures Slip; Dollar Up as French Turmoil Grows: Markets Wrap – Yahoo Finance
(Bloomberg) — U.S. stock futures signaled a modest pullback from Friday's record close for the S&P 500 index, while the dollar rose as the crisis over the French government deepened.
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Stock contracts fell about 0.2%, signaling a pause in the gains that produced the S&P 500's strongest month of the year. In Europe, Stellantis NV shares fell more than 8% after CEO Carlos Tavares resigned from the company over a dispute with the company's board.
The Bloomberg Dollar Index rose 0.4%, while the euro fell after France's far-right party threatened to overthrow the government amid a standoff over the national budget. French government bonds fell, and the CAC40 stock index also fell in Paris.
“There is certainly political instability, and French government bonds are pricing in that volatility,” Ekaterina Bigos of AXA Investment Management told Bloomberg TV. “Political instability creates uncertainty, but more importantly what France intends to do to reduce its budget deficit.”
Meanwhile, U.S. Treasuries fell as traders looked ahead to U.S. data that could help shape Federal Reserve policy and weighed the Bank of Japan's hawkish comments. President Donald Trump's comments that BRICS countries should not create currencies comparable to the US dollar further supported the dollar. This was yet another reminder of the US President-elect's America First policy.
“President Trump's inauguration will put upward pressure on the U.S. dollar given some of the policy stances he has talked about, such as tariffs,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners. said.
The dollar has appreciated about 2% since the Nov. 5 election, but December is typically a month that affects dollar weakness. The dollar has posted losses in eight of the past 10 years, often at the expense of end-of-year portfolio rebalancing trends or the so-called Santa Rally, which encourages traders to sell the dollar into riskier assets such as stocks. It became.
And this time, in a month packed with nine major central bank policy meetings and major economic indicators, the possibility of sudden price changes comes as President Trump's social media posts risk roiling markets and spooking traders. It's becoming more sexual.
Amid this week's notable global events, Federal Reserve Chairman Jerome Powell will participate in a moderated discussion on Wednesday. Statistics released on Friday will provide an assessment of the US job market.
The euro fell by 0.6%. The single currency could fall further after Governing Council member Martins Kazaks told broadcasters that the European Central Bank should continue to cut borrowing costs.
Bank stocks have fallen due to France's financial crisis, with stocks such as Société Générale, Credit Agricole and BNP Paribas all falling. OddBHF strategist Thomas Zrowocki said the possibility of a government collapse was not factored into French assets. He suggested that the CAC40 could fall by 5% and the yield gap between French and German government bonds could widen further.
Stocks rose in Asian markets on Monday on signs of economic stabilization in China. Manufacturing activity in the world's second-largest economy expanded for the second consecutive month in November, according to a private survey on Monday. Bank of Japan Governor Kazuo Ueda said interest rate hikes were “coming close” as economic trends continued in line with the central bank's outlook.
Chinese statistics also supported oil prices. The rise in the US dollar caused the fall in gold prices.
