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Euro slides, French bond futures dip on political
uncertainty
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Chinese stocks boosted by robust manufacturing surveys
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Trump buoys dollar with tariff threat on BRICS
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Japan bond yields hit 16-year high on BOJ rate hike bets
(Adds French stock futures, refreshes prices to morning trading
in Europe)
By Amanda Cooper and Kevin Buckland
LONDON/TOKYO, Dec 2 (Reuters) - The euro fell on Monday
as mounting political uncertainty in France kept European
markets under pressure, while tech stocks lifted global shares
and the dollar strengthened in a key week for the outlook for
U.S. interest rates.
The U.S. currency got an additional boost from U.S.
President-elect Donald Trump at the weekend, who warned BRICS
emerging nations against trying to replace the greenback with
any other currency.
"There'll be two drivers of market volatility this month.
The first remains the impact of Trump, especially future fiscal
settings and, increasingly, looming trade wars," said Kyle
Rodda, senior financial markets analyst at Capital.com.
"The second is what the U.S. Federal Reserve does with
policy this month," Rodda said. "If the Fed delivers (a cut) and
provides sufficiently dovish guidance, it may green light some
sort of 'Santa Rally'."
The euro was struggling and French stocks looked set to
slide later due to the risk of an imminent collapse of the
French government, with Prime Minister Michel Barnier confronted
with a Monday deadline to make more budget concessions or face a
no-confidence vote.
France's far-right National Rally (RN) party will likely
back a no-confidence motion against the government unless there
is a "last minute miracle", RN president Jordan Bardella said on
Monday.
The euro fell as much as 0.57% to $1.05155
earlier, having traded at one-week highs on Friday. French stock
index futures fell 1.4%, pointing to a sharp drop at the
start of trade for the CAC 40 index.
If the Barnier government falls, broader downward pressure
on the euro would quickly re-assert itself, including against
the Swiss Franc, said Paul Mackel, global head of FX research at
HSBC.
The Federal Reserve is in sharp focus right now, with
Friday's monthly payrolls report set to inform policymakers'
thinking about whether to cut rates again on Dec. 18.
A number of Fed officials are due to speak this week,
including Fed Chair Jerome Powell on Wednesday. Traders put the
odds of a quarter-point reduction at about 66%.
That has left the dollar index, which measures the
currency against six major rivals, 0.24% higher at 106.28.
In Asia, Chinese shares got an additional boost from a
robust reading in a private manufacturing survey on Monday.
Hong Kong's Hang Seng inched up 0.16%, while mainland
Chinese blue chips rose 0.6%.
In a holiday-shortened session on Friday, the S&P 500
and Nasdaq added 0.6% and 0.8% respectively to close at
all-time highs.
The yen, meanwhile, weakened 0.4% to 150.31, but
remained near Friday's six-week high of 149.47.
In cryptocurrencies, ether hit a near six-month high
of $3,762.20 and was last up 2% at $3,674.44. Bitcoin was
last at $96,434, hovering close to the record high from Nov. 22
at $99,830.
Gold sank 1% to $2,627.71 under pressure from the
strong dollar, after sliding over 3% in November, its worst
monthly performance since September, 2023.
Oil prices rose after Chinese manufacturing data, and as
Israel resumed attacks on Lebanon despite a ceasefire agreement.
Brent crude futures were up 0.8% at $72.41 a barrel,
while U.S. crude was up 0.87% at $68.59.
(Additional reporting by Kevin Buckland in Tokyo and Ankur
Banerjee in Singapore; Editing by Kate Mayberry, Shri Navaratnam
and Ed Osmond)