European markets
French stocks on the CAC 40 index opened lower before jumping to a 0.54% gain, trading at its highest level since Nov. 12, while the euro was 0.25% higher against the U.S. dollar.
A majority of lawmakers from both the left-wing New Popular Front alliance and the far-right National Rally supported a no-confidence motion in the country’s lower house Wednesday evening, as was expected.
Motions had been tabled by both the left- and right-wing blocs Monday after Barnier, who has been in power for only three months, used special constitutional powers to force a social security budget bill through Parliament without a vote.
France’s 10-year bond yield, which has been in focus in recent months as it climbed against other euro area countries amid the political volatility, was slightly lower. The 2-year yield was 2 basis points higher.
“What probably reassures markets to some extent right now is there is not going to be anything like a government shutdown in France. The parties which voted against the government said they would vote against the special rule which would normally roll over the Budget for next year. So there is no immediate threat, I would say,” Gilles Moec, group chief economist at Axa, told CNBC’s “Squawk Box Europe.”
Ahead of the open, the U.K.’s Competition and Markets Authority approved a merger between telecoms firms Vodafone and Three, subject to conditions. Vodafone shares opened 0.6% higher.
Oil major Shell and Norway’s Equinor meanwhile announced plans to combine their British offshore oil and gas assets to create a jointly owned energy company in Aberdeen, Scotland, set to become the U.K. North Sea’s largest independent producer.
Elsewhere overnight, Asia-Pacific markets traded mixed after Wall Street stock benchmarks notched record highs yesterday. U.S. stock futures were broadly unchanged on Wednesday night.
There are no major earnings or data releases in Europe Thursday.
France’s CAC 40 hits 3-week high amid political uncertainty
French markets open in the green despite ongoing political uncertainty following the collapse of Prime Minister Michel Barnier’s government.
Cac
“The market has already gone further than ratings agencies… What I think is interesting is that there hasn’t been much movement the last few days on the spread, because a lot of these developments were priced last week,” Gilles Moec, group chief economist at Axa, told CNBC’s “Squawk Box Europe” on Thursday.
“What probably reassures markets to some extent right now is there is not going to be anything like a government shutdown in France,” Moec added, saying that investors are already assuming there will be early elections in the middle of next year, once it becomes constitutionally possible again.
French 10-year bond yields were trading around 1 basis point higher at 9:41 a.m. London time at 2.904. The CAC 40 was 0.31% higher, trading around 7325 points.
“There is an issue obviously around the number of bonds that France will emit in the years ahead because the deficit remains too high,” Moec said. “But it’s not as dramatic, at first glance, an alliance would probably conclude to.”
— Abby Ryanto
Europe stocks open mixed
Stoxx 600 index.
European stock markets opened mixed on Thursday as investors assessed political uncertainty in France.
France’s CAC 40 was up 0.13% at 8:11 a.m. in London, while Germany’s DAX gained 0.06%. The U.K.’s FTSE 100 slipped 0.05%.
— Jenni Reid
France faces bond market jitters but it is not Greece in 2010, economist says
France is facing an unsustainable debt trajectory and higher bond yields, but its situation is not the same as the Greek sovereign debt crisis of 2010, according to George Lagarias, chief economist at Forvis Mazars.
“France is not insolvent to begin with, A, and B, big countries, G7 countries, they don’t get debt crises in the 21st century. This is the purview of smaller countries. Greece was insolvent way before any of that happened,” Lagarias told CNBC’s “Squawk Box Europe.”
France has faced months of political instability since its snap summer election, and its minority government was ousted in a no-confidence vote on Wednesday.
French borrowing costs have risen to a 12-year high against Germany’s amid concerns that it will not be able to pass a budget to reduce its deficit, while its bond yields drew level with Greece’s for the first time on record. That was seen by analysts as a symbolic milestone, given France’s stronger fundamentals and Greece’s turbulent market history, which saw its bonds downgraded to junk status in 2010 and subsequent bailouts.
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“France is going through something, it’s political tumult… There might be some jitters in the bond markets, because bond markets are really upset about inflation and tariffs and all that. So, you know, some of that could seep into the bond markets going forward, some of that uncertainty. But France is not Greece,” Lagarias said.
“We have to acknowledge it’s not the euro zone crisis, [countries] can borrow their way out of trouble, just not at the pace that they’re used to. We have debt acceleration, and that happens everywhere in the world right now. The U.S. is the primary culprit.”
— Jenni Reid
Shell and Equinor to create Britain’s largest independent oil and gas company in joint venture
Oil major Shell and Norway’s Equinor on Thursday announced plans to combine their British offshore oil and gas assets to create a jointly owned energy company.
Read the full story here.
— Sam Meredith
UK regulator clears Vodafone-Three merger
The U.K.’s Competition and Markets Authority on Monday approved the merger of telecom firms Vodafone and Three.
The CMA set several conditions for the £15 billion ($19.5 billion) deal, including that the companies commit to investing billions to roll out a combined 5G network across the U.K.
The organization had previously raised concerns the combined entity would lead to price increases for tens of millions of customers or see some users get reduced services.
Vodafone share price.
Read the full story here.
— Jenni Reid
Bitcoin tops $100,000 for the first time ever
The price of bitcoin soared past the long-awaited $100,000 benchmark for the first time ever late Wednesday evening.
The flagship cryptocurrency was last higher by more than 7% at $102,879.60, according to Coin Metrics. Earlier, it rose as high as $103,844.05.
The move came hours after President-elect Donald Trump announced plans to nominate Paul Atkins as chair of the Securities and Exchange Commission. The same day, Federal Reserve Chair Jerome Powell said bitcoin was “just like gold only it’s virtual, it’s digital,” speaking at the DealBook conference.
For more on bitcoin’s historic milestone read our full story here.
— Tanaya Macheel
CNBC Pro: ‘It is key to remain invested,’ Julius Baer portfolio manager says. Here’s how she’s investing
The persistent uncertainty in financial markets has raised questions on portfolio construction and how to invest across asset classes as 2025 nears.
One long-term investor is now playing the market by staying invested and being well-diversified.
“We believe it is key to remain invested and view any potential corrections as technical and temporary opportunities to get into the market,” Julius Baer International’s portfolio manager Aneka Beneby said.
She also revealed how and what she is allocating to in the lead up to the new year.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
European markets: Here are the opening calls
European markets are expected to open lower Thursday.
The U.K.’s FTSE 100 index is expected to open 17 points lower at 8,342, Germany’s DAX down 7 points at 20,225, France’s CAC down 28 points at 7,275 and Italy’s FTSE MIB down 82 points at 33,747, according to data from IG.
There are no major earnings or data releases in Europe Thursday.
— Holly Ellyatt
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