Ipek Ozkardeskaya
Swissquote Bank Ltd
December doesn’t arrive with chocolate and flowers to Europe. First, Stellantis CEO resigns on weaker sales and tumbling profits. Second, VW workers are expected to walk out as early as today, because their labour leaders couldn’t reach an agreement on how to reduce costs to prevent factory closures. And finally, the French political scene remains messy with the far-right party Marine Le Pen threatening to team up with the leftist and take down Michel Barnier’s government by Wednesday if he doesn’t come up with a less strict budget plan. The euro is under pressure this morning.
In Japan, the news are not brighter. Nissan’s CFO decided to step down as well and the Japanese manufacturing PMI fell to the lowest level since March. The news gives the USDJPY a good reason to rebound back above the 150 level this morning.
The downside pressure on euro and the yen is giving a boost to the US dollar early this week. The US dollar index is up and above the 106 this morning after retracing a part of its recent gains last week. Attention will be on US jobs data and OPEC decision this week.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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GBP/USD stabilizes above 1.2700, struggles to gain traction
GBP/USD trades in negative territory, while managing to hold above 1.2700 on Monday. The pair's upside remains limited amid a pickup in the haven demand for the US Dollar, as traders remain wary over the latest Trump tariffs threat on BRICS nations. US ISM PMI is next in focus.
Gold stays below $2,650 on broad-based USD strength
Gold starts the new week on the back foot and trades below $2,650. The renewed US Dollar strength and the recover seen in the US Treasury bond yields don't allow the pair to stage a rebound as investors' focus shifts to US PMI data.
The week ahead: Payrolls take centre stage, as French government poised to collapse
At the start of this week, the focus is likely to be on France. On Sunday, Marine Le Pen said that her party’s talks with the government led by Michel Barnier, had broken down, which paves the way for a no-confidence vote in the technocratic government that has no majority in Parliament.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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