The Morning Update

The USD is steady, oil prices firm, equity markets are mixed, and US yields rise ahead of the French vote & Powell's comments. Currency markets remain steady despite the upcoming French no-confidence vote and the Korean Martial Law debacle. The US S&P 500 edged higher to another record close, Chinese equities were down, while European equities made modest gains as investors braced for political updates from France and are cautious ahead of the Fed Chair Powell's comments. France is expected to give a no-confidence vote to PM Barnier's government and throw the country into political turmoil. Later in the day, Powell's speech and US Jobs & PMI report as investors assess whether the Fed will ease rates at its December meeting. Elsewhere, oil prices edged higher ahead of expected OPEC+ supply cuts, while Bitcoin strengthened 1% to $96.6k, and Gold & Silver prices are down. In focus today, French no-confidence vote, US ADP Employment Change, ISM Services PMI, Fed Powell & ECB President speeches will help drive direction to currency markets intraday.

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In other news. South Korean president faces impeachment after martial law debacle. Eurozone business activity declines sharply in November, PMI shows. BoE's Bailey sticks to 'gradual' script for rate cuts. Crunch time in France as lawmakers look set to oust PM Barnier's government. Trump's plan for Ukraine comes into focus: Territorial concessions but NATO off the table. The EU to crackdown on Asian online retailers Temu & Shein. The German Bundesbank chief calls for softer debt brake to increase investment. The RCMP commissioner open to deploying cadets to harden the border. Trump's '51st state' comment was nothing but a joke, says Canada's public safety minister.

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In currency markets. The USD, EUR & GBP are steady, while AUD tumbled on disappointing GDP data and weaker than expected Chinese Caixin Services PMI report. The CNY edged off a 13-month low against the USD, but remains under pressure from weak domestic performance and ongoing tariff threats from the incoming Trump administration. CNY firms 0.2%, while Asian currencies are down 0.15% on average against the USD. Trading currencies are mixed with AUD tumbling 1.15%, JPY & NZD weakened by 0.8%, MXN, ZAR & NOK eased 0.2%, CHF & SEK flat against the USD.

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In commodity markets. oil prices firmed by 0.4%. Natural gas & Soybean prices tumbled by 0.8%. Gold prices are flat. Silver & Wheat prices weakened by 0.5%, and Copper prices eased by 0.3%.

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CAD edges off Tuesday's lows, but remains under pressure with weakening commodity prices, ongoing tariff concerns and the prospect of diverging interest rates between the BoC & Fed. Investors will be focused on today's US economic releases and Fed Chair's comments to help gauge direction of the Fed's policy at its Dec 17/18th meeting. Domestically, investors will be waiting for the Canadian jobs report to help provide direction for Dec 11th BoC interest rate decision.

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EURCAD inches lower as markets are sidelined ahead of the French no-confidence vote today.

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EUR straddles 1.0500 amid French political uncertainty. Investors are sidelined ahead US Jobs, ISM & Fed Chair Powell's speech, and from Europe ECB President Lagarde speech, as well as the French no-confidence vote to drive direction for the Euro today.

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GBPEUR holds steady with BoE Bailey's dovish comments being offset by uncertainty ahead of the no-confidence vote in France and EBC President Lagarde's comments today.

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GBP slips below 1.2700 following dovish BoE comments, ahead of US data and Powell today. The pound eased from 1.2700 after BoE's Bailey's signaled expectations of four rate cuts in 2025. Governor Bailey said that policy makers still believe four quarter-point interest rate cuts next year is most likely scenario as he said inflation has come down"faster than we thought it would." Markets will be focused on Fed Chair Powell's comments and US economic data releases to provide direction to the pound today.