EBC Markets Briefing | Euro rises after Moody's spares France

The euro firmed on Monday as Moody's refrains from downgrading France's credit rating. That is handing a surprise reprieve to the country, but investors remain concerned about debt pile.

PM Macron's minority government is locked in a parliamentary battle to pass the proposed 2027 budget. A unified opposition has slammed the spending plan for being too austere, threatening to derail the bill entirely.

The wave of civil unrest gripping France has reached Italy, Spain and Portugal. Recent weekend developments include violent clashes and arson in Milan, alongside the arrival of a makeshift tent city in Lisbon.

Mediterranean' vulnerability to high inflation is more severe than the rest of the EU as real wages in the region have stagnated for years. The extreme housing crisis is also biting.

US Treasury yields held onto their recent safe-haven gains. A tech-driven selloff over AI concerns triggered a shift out of riskier assets, while high oil prices sustained fears of persistent inflation.

Saudi forces intercepted several Houthi-launched drones and missiles bound for multiple cities, including Riyadh, on Sunday, according to the Saudi-led coalition in Yemen.

EBC Financial Group analyst says the euro has repeatedly failed to breach the 1.12520 – 1.12620 zone. A drop below $1.1200 seem likely if the price fails to hold above $1.1223.

Asset Recap

As of market close on 23 October, among EBC major products, Schlumberger shares led gains as the Middle East business was healing even with war-related interruptions.

A report says SpaceX is angling to lease 80,000 mobile towers on the ground, and plans to build a fourth major mobile telecommunications company to compete with T-Mobile.

Oil has hit its highest level in more than six months after Tehran said it would attack oil facilities, undersea cables, datacentres and AI facilities in the Gulf region if a new US-Israeli offensive was launched against Iran.

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EBC Financial Group Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Global Financial Collaboration or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.