Europe Summary and Highlights 2 December

European morning session

A quiet European morning saw some modest EUR losses, but otherwise little net FX movement. Early trading saw the EUR generally softer, with EUR/USD dipping marginally below 1.05 before bouncing back to just below opening levels around 1.0520.  USD/JPY also started softer, dipping to 150 before bouncing back. EUR/GBP tested down to a low of 0.8270 from an open at 0.8290 before bouncing back to 0.8280.

The EUR’s weakness was attributed to increasing concerns about a possible government collapse in France, which would stall plans to curb a burgeoning budget deficit. French right wing RN party president Jordan Bardella said RN will likely back a no-confidence motion against the government on Wednesday unless there is a "last minute miracle". Otherwise, there was some final manufacturing PMI data from Europe, with the Eurozone index unrevised at 45.2 and the UK index revised down to 48.0 from 48.6.

Asia session

Over the weekend, Trump tweeted that he had a productive meeting with Trudeau while feeling the other way with BRICS. The equity space is opening the week with individual performance with Chinese and Hong Kong equities in the green and Nikkei & U.S. three major equity indexes in the red. AUD/USD slipped 0.30% to 06494 as the USD is broadly stronger, NZD/USD lost 0.51% to 0.5894 while USD/CAD rose 0.26%.

The USD is starting the week higher, a partial rebound from last week's weakness after Trump's tweet over the weekend ease partial trade war worries. From the geopolitics front, Netanyahu said that conditions are ready after the end of the war in the north to complete a deal in Gaza, which seems to cement headlines crossing wires in the past week for a ceasefire deal in the region. USD/JPY rose to 150.54, up 0.56% for the session with U.S. Treasury and JGB yields higher. Else, EUR/USD is down 0.48% and GBP/USD is down 0.36%. Major FX opened in favor of the USD but was once closed.