This weekend's events have set the stage for a dynamic start to the week, with the EUR taking a dip and the USD gaining strength. President-elect Trump threatened BRICS nations with 100% tariffs should they create a new currency to replace the USD. Political uncertainty in France is seeing a broadly weaker EUR after French Finance Minister Antoine Armand stated that the government will not be blackmailed by Marine Le Pen over the 2025 budget.
France’s far right leader Jordan Bardella also commented that his party will topple the government unless there is “a last-minute miracle”. The French government is set to face three consecutive no-confidence motions starting this week.
*Daily move - against G10 rates at 7:30am, 02.12.24
** Indicative rates - interbank rates at 7:30am, 02.12.24
Week one of the month can only mean one thing - US jobs week! JOLTS job openings on Tuesday are likely to have held nearly steady in October following September’s downside surprise. Friday's job report is expected to show an addition of 200,000 jobs - a rebound from the 12,000 jobs added in October - and the unemployment rate is expected to tick higher. This will be the final employment data before the Fed's crucial meeting on December 18th, where they might decide to hold steady on interest rates.
As mentioned above, the EUR is on the back foot this morning and we continue to monitor developments in France to see how the currency continues to fare and whether we see recent EUR lows tested again.
On the data front, ISM manufacturing numbers are in focus today to gauge the economic performance in the US and see if it supports the Federal Reserve (Fed) skipping rate cuts this month.
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