Stocks Slip With Euro on France’s Fiscal Worries: Market Wraps

(Bloomberg) — European equity futures fell against Asian stocks, and the euro eased on worries about France’s post-election finances.

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CAC 40 Index futures fell, as did the Euro Stoxx 50 index after the unexpected victory of the left-wing coalition in the French legislative elections. MSCI’s Asia Pacific index was also lower, with a gauge of Shanghai shares extending a long-term decline due to weak economic momentum in the country.

While France’s New Popular Front – which includes the Socialists – came first in the weekend vote, financial market losses were tempered by the news that no party won the majority needed to govern. The result could limit the influence of the left-wing coalition and Marine Le Pen’s National Rally, both of which support public spending.

“France went from voting for the right to giving support to the left,” said Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, referring to two rounds of voting in a week. France is “looking for a solution at two extremes and not an ideal result.”

Bitcoin fell with other cryptocurrencies due to concerns about possible token sales by creditors of the exchange Mt. Gox that failed. In China, the central bank seeks to control market interest rates by announcing additional open market operations and tightening the band within which short-term rates can fluctuate.

Boeing Co agreed to plead guilty to criminal conspiracy to defraud the US after the Justice Department concluded the planemaker failed to comply with earlier settlements stemming from two crashes of its 737 Max jetliner.

Reflecting concerns about rising state spending, French government bond futures have underperformed their German counterparts. But at the sign of reduced jitters, the spread between the two has begun to narrow.

France’s New Popular Front won 178 seats in the National Assembly, according to data compiled by the Interior Ministry. The National Rally, which last week’s poll had won the election, came in third with 143, while President Emmanuel Macron’s centrist alliance got 156.

For the rest of the week, events in the US will make trading.

Federal Reserve Chairman Jerome Powell’s congressional testimony and US inflation data are among the main events this week. Traders will be looking for both to solidify easing policy bets that could start as early as September amid signs of a weakening US economy based on the latest jobs report.

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The prospect of Fed interest rate cuts in the coming months got a boost on Friday after nonfarm payrolls data showed US hiring and wage growth slowed in June, while the unemployment rate rose to the highest level since late 2021.

Earnings from major US banks including JPMorgan Chase & Co. also because, like the tariff decisions in New Zealand and South Korea.

President Joe Biden is facing new threats from members of his own party as he tries to salvage his re-election bid and resists calls from Democratic lawmakers to step aside. Biden registered the best showing in a Bloomberg News/Morning Consult tracking poll of battleground states, even as voters weighed in on his debate performance.

In commodities, gold and oil remained stable. In the latter case, traders are tracking the twin threats to production posed by storms in the US and wildfires in Canada.

This week’s highlights include:

• Indian Prime Minister Narendra Modi visited Moscow on Monday

• Fed Chairman Jerome Powell delivered his semi-annual testimony to the Senate Banking Committee on Tuesday

• US Treasury Secretary Janet Yellen testified before the House Financial Services Committee on Tuesday

• Fed Vice Chairman for Supervision Michael Barr, Governor Michelle Bowman said on Tuesday

• China PPI, CPI, Wednesday

• PPI Japan, Wednesday

• Fed Chairman Jerome Powell testified before the House Financial Services Committee on Wednesday

• Chicago Fed President Austan Goolsbee and Fed Governor Michelle Bowman spoke on Wednesday

• BOE chief economist Huw Pill, BOE policymaker Catherine Mann said on Wednesday

• US CPI, initial jobless claims, Thursday

• Atlanta Fed President Raphael Bostic, St. Louis Fed President Alberto Musalem said

• Japanese industrial production, Friday

• China Trade, Friday

• US University of Michigan consumer sentiment, PPI, was

• Citigroup, JPMorgan, Wells Fargo and Bank of New York Mellon reported quarterly earnings on Friday

Some of the main movements in the market:

Savings

• S&P 500 futures fell 0.2% at 15:11 Tokyo time

• Nikkei 225 futures (OSE) were unchanged

• Japan’s Topix down 0.6%

• Australia’s S&P/ASX 200 fell 0.8%

• Hong Kong’s Hang Seng down 1.8%

• Shanghai Composite down 0.8%

• Euro Stoxx 50 futures down 0.2%

currency

• The Bloomberg Dollar Spot Index was little changed

• The euro fell 0.2% to $1.0818

• The Japanese yen rose 0.1% to 160.56 per dollar

• The offshore yuan was little changed at 7.2884 per dollar

Cryptocurrencies

• Bitcoin fell 3.5% to $55,274.07

• Ether fell 3.1% to $2,906.16

Bond

Commodity

• West Texas Intermediate crude fell 0.5% to $82.73 a barrel

• Spot gold fell 0.4% to $2,383.68 an ounce

This story was produced with the help of Bloomberg Automation.

–With assistance from Michael G. Wilson, Matthew Burgess, Ivy Chok and Michael Msika.

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