French turmoil hits euro, US futures eye rebound

Key highlights:

Market data:

• AUD is the best performer today, while EUR is the worst.
• WTI crude oil fell 0.4%, trading at $98.64.
• Gold gained 0.2% to reach $4,172.
• European equities are lower, while S&P 500 futures are up 0.5%.
• Bitcoin rose 1.5% to $82,124.

Europe is experiencing a mixed start to the new trading week.

European stock market sentiment is pessimistic, contrasting sharply with the optimistic tone of US futures. Major European indexes have dropped more than 1%, as French riots introduce further uncertainty to a fragile political and fiscal environment. This is pressuring both regional equities and the euro at the start of the week.

EUR/USD declined 0.2% to 1.1220, briefly dipping below the 1.1200 level earlier. The dollar is showing mixed performance overall, with USD/JPY edging up 0.1% to 158.18, while AUD/USD climbed 0.6% to 0.6985.

Turning to US futures, technology stocks are attempting to recover from last week's sharp declines. Nasdaq futures are leading the recovery, rising 1.2% today. A slight decline in Treasury yields is offering relief for tech shares, though the bond market remains a crucial factor for the sustainability of this rebound.

Gold is also benefiting from the lower yield environment, rising 0.2% to $4,172. A retest of the $4,200 level may be on the horizon as the US bond market selloff takes a pause.

As the new week begins, Wall Street appears willing to overlook Europe's political issues and instead focus on the relief from falling Treasury yields. However, it remains to be seen whether this optimism can persist if Treasury yields resume their rise or if Europe's political tensions spread to broader market sentiment.