Amid rising volatility in European bond markets, the political situation in France raises particular concerns. Investors are closely watching developments.
Political Situation in France
In France, a confidence vote in Prime Minister Francois Bayrou's government is scheduled. Opposition forces are ready to vote against the ruling party, which could lead to new elections. Investors are worried that a sell-off in French bonds may trigger broader doubts about regional stability.
Role of the European Central Bank
The European Central Bank (ECB) is set to meet on Thursday, where rates are expected to remain at 2%. ECB President Christine Lagarde is anticipated to maintain a dovish tone but provide little guidance about future actions. The uncertainty surrounding the bank's future policy is exacerbated by rising political risks.
U.S. Labor Market Condition
According to the August report, the U.S. created only 22,000 jobs, marking the weakest reading since the pandemic. Despite growing concerns about the economy and pressure on the Federal Reserve, inflation is starting to rise again, complicating the central bank's tasks.
In the face of financial market instability driven by political risks and economic data, investors continue to monitor signals from central banks and labor market conditions while anticipating further actions from authorities.
