Closing post
Time to wrap up….
Political drama in Paris and Tokyo have gripped investors today, with mounting anxiety over politicians’ ability to address rising government debt levels.
French government bond prices have dropped today, after Sébastien Lecornu startled the markets by resigning as France’s prime minister after less than a month in the post.
Lecornu quit following a row over the centrist-dominated government named by Emmanuel Macron yesterday, and amid the ongoing struggle to agree a French budget.
Stocks fell in Paris, where the CAC40 index is now down over 1%. The euro weakened, losing half a cent against the US dollar. Worryingly for the French government, the gap between their borrowing costs and Germany’s hit a nine-month high.
Lecornu’s resignation plunges France into fresh chaos, and appears to leave Macron with three options.
Appoint a new prime minister and make another attempt to push a budget through
Hold new parliamentary elections
Resign and call a presidential election
Over in Japan, stocks surged after pro-stimulus candidate Sanae Takaichi was elected as leader of the governing Liberal Democratic party (LDP).
Takaichi, who is expected to become Japan’s prime minister later this month, is tipped to push for higher government spending and looser monetary policy.
This hit long-term Japanese bond prices, and weakened the yen, but also drove the Nikkei 225 index up by 5% today.
Several large banks said they were closing bullish trade recommendations on the Japanese yen after Takaichi’s win.
Amid the market anxiety, gold rose to a new record high of $3,949 per ounce, while Britain’s FTSE 100 share index traded over 9,500 points for the first time.
Updated
Wall Street lifted by AMD/OpenAI deal
The US stock market has opened higher, as traders hail the deal between AMD and OpenAI today.
There’s no sign that the French political crisis is worrying Wall Street, though.
The S&P 500 share index has risen by 0.25% at the open, with AMD surging by 33%.
