A look at the day ahead in European and global markets by Kevin Buckland
France remains the focus of Europe’s attention on Tuesday, with its government almost certain to collapse after both its right and left wings tabled motions of no confidence.
The final blow was Prime Minister Michel Barnier’s attempt to ram a social security bill through parliament without a vote, making the fragile coalition on Wednesday the first French government to be forced through a vote of no confidence since 1962.
It plunges Europe further into political crisis as the year ends, with Germany facing snap elections following the collapse of the government there, just as Donald Trump is set to return to the White House and threatens huge tariffs for the region because not enough US dollars are being purchased. cars and agricultural products.
However, France can at least celebrate some warming of ties with the president-elect. Trump praised the reconstruction of Notre-Dame Cathedral in Paris and will attend its reopening on Saturday during his first foreign trip since his election victory.
The euro remained in the background on Tuesday, but pan-European STOXX 50 futures pointed higher, building on the wave of positivity from new record highs on Wall Street.
The economic data calendar is empty in Europe today, but a pre-recorded interview with ECB board member Piero Cipollone will be broadcast at an event in Milan.
Fed speakers include Chicago Fed Chief Austan Goolsbee and Fed Governor Adriana Kugler in Chicago and Detroit, respectively.
The macro highlight of the day will be US JOLTS vacancies, a favorite among Fed officials, serving as a prelude to Friday’s all-important monthly payroll report.
Bets on a quarter-point rate cut on December 18 have risen and now stand at 75% on CME’s FedWatch Tool, up from 66% a day earlier and 52% a week ago.
Key developments that could impact the markets on Tuesday:
-ECB’s pre-recorded interview with Cipollone
– Chicago Fed’s Goolsbee and Governor Kugler speaking at separate events
-US JOLTS vacancies (October)
