- The French government is close to collapse due to the French Prime Minister’s persistence on the latest budget.
- French bond yields rise to their highest since 2012 and the Euro attempts to correct upwards during this morning’s session.
- According to state central banks, the ECB will continue cutting interest rates in December. Is the current bullish Euro temporary?
- The SNP500 renewed its highs for a second consecutive day mainly due to gains from Meta, Tesla and Microsoft.
EURUSD – ECB Members Indicate Cut For December!
The US Dollar is declining in value against most currencies this morning after significant gains on Monday. However, the performance throughout the week will depend on the JOLTS Job Openings, ADP Employment Change, NFP and US Unemployment Rate.
Positive dynamics have been unfolding amid Trump’s warning to BRICS nations against creating a currency alternative to the US Dollar, threatening 100% tariffs on their exports. Experts fear this signals a potential trade war with China, India, Russia, and others. Moscow countered that forcing reliance on the Dollar could erode its appeal as a reserve currency.
Meanwhile, investors await November employment data. With private consumption rising (2.1% to 2.3%) and core inflation increasing (2.7% to 2.8%), further labor market strength could challenge a December rate cut of 25 basis points. Most experts still expect the Fed to proceed, but a pause in rate cuts is anticipated early next year.
Currently, the Euro is the second best performing currency of the day behind the Australian Dollar. Many believe this is partially due to the competitive price and high Bond Yields. However, this can quickly change as the ECB’s dovishness and France’s political and budget crisis continue. ECB Governing Board member Yannis Stournaras indicated today that interest rates are likely to be cut further in December, with experts anticipating a 25 basis point reduction.
For the Euro to maintain a buy signal in the short-term, the price will need to rise above $2,647.92 and this afternoon’s JOLTS Job Opening to fall below expectations.
SNP500 – Stocks Reach All-Time High!
The SNP500 so far this year is trading 27.50% higher and is at an all time high. This is mainly due to gains from Meta, Tesla and Microsoft. On Monday, 59% of the most influential stocks rose in value.
Wedbush Securities reaffirmed an “Outperform” rating on Apple shares with a $300 target, citing a potential record 240 million iPhone sales in fiscal 2025, driven by the new Apple Intelligence AI feature. Last month, Apple reported $94.9 billion in revenue and $1.64 EPS, beating forecasts and last year’s figures.
The performance of the SNP500 will depend on this week’s employment data, similar to the US Dollar. Most analysts believe the ideal scenario for the stock market is for the data to come in as expected.
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Michalis Efthymiou
Market Analyst
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