From Marc to Market:
Overview: The capital markets have been choppy as pre-existing positioning meets new thoughts on the implications of a second Trump administration. The dollar has found better footing today after giving back a chunk of Wednesday's gains yesterday. The yen is an exception, but it is not exception that the dollar trades heavier against the yen as the US 10-year yield drifts lower. On the week, the most G10 currencies are holding on to gains against the dollar. Here the euro is the notable exception, off about 0.6%, and is thought to be the most at risk.
Equities are mostly lower today. The market did not seem impressed with the local debt swap initiative from Beijing, and the CSI 300 fell 1%. Europe's Stoxx 600 is giving back yesterday's 0.6% gain in full, and US index futures are slightly softer. Bonds are bid. European 10-year benchmark yields are 4-6 bp lower, which unwinds most of the backing up seen earlier this week in the UK, Germany, and France. After recovering above $2700 yesterday, gold has come back offered. It found support near $2680, but it does not look secure. Yesterday's low a little above $2643. December WTI is unwinding yesterday's gains and more. Still, around $71, it is up 2.4% on the week........Europe
The media says German Chancellor Scholz called for a snap election after firing Finance Minister Linder, a post given to the FDP to form the tripartite governing coalition. But this does not seem to be the best characterization of it. Scholz is not calling for a snap election, and that is precisely the rub. He does not want to have an election until March. That is not "snap". That brings forward the election by six months. The opposition leader, Merz, who appears to be supported by nearly twice the number of Germans as Scholz wants vote of confidence next week and an election as soon as mid-January....
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