FTSE 100 quiet but all eyes now on France

Chris Beauchamp IG

Eurozone headlines are once again providing cause for concern, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

FTSE 100 touches new one-month high

The FTSE 100 briefly surged to a one-month high today, but a dearth of major news meant that the gain could not be sustained. It has been a day of diverging fortunes for European markets – the FTSE 100’s flat session sits between an ebullient Dax, which hit a new record high and a CAC40 that is being pulled first one way and then another by the growing political crisis in France.

Barnier government on the way out?

It has been a seesaw day for European markets, particularly French ones. Earlier signs of a climbdown by the Barnier government were cancelled out by the man himself, who decided to throw caution to the wind by pushing through his budget, bringing forth the inevitable censure proposals by both the Left and Right. The brewing political crisis in France looks set to burst out once more, weighing on risk appetite in a eurozone already struggling to create sustainable growth.

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Chris Beauchamp

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.