US Session: Mixed start on Wall Street after the holiday week.

The dollar continued to strengthen as the deepening crisis surrounding the French government weighed on the euro. U.S. Treasuries also fell as traders awaited new U.S. economic data later in the day that could weigh on the outlook for interest rates. U.S. futures were trading marginally higher, pointing to a positive start on Wall Street after the U.S. holiday last week. Tesla Inc. shares rose in premarket trading on upbeat comments from analysts. In Europe, Stellantis NV fell about 7% after Chief Executive Carlos Tavares left the company in a dispute with the board. The dollar index rose 0.5%, while the euro weakened 0.6% as the French government struggled to avoid being ousted by the far-right in a budget dispute. French bonds and stocks rebounded slightly after Prime Minister Michel Barnier made last-minute concessions to Marine Le Pen’s party. “There is definitely political instability and that is reflected in the prices of French government bonds,” Ekaterina Bigos of AXA Investment Management told Bloomberg TV. “Political instability creates uncertainty, but the more important question is what France will do to reduce its deficit.”

U.S. Trader Sentiment and Dollar Outlook

Meanwhile, U.S. bonds edged lower as traders awaited new U.S. economic data that could influence Federal Reserve policy. Further support for the dollar came from Donald Trump’s comments that BRICS countries should not create a currency to compete with the dollar – another reminder of America’s priority in his policy. A Trump presidency will put upward pressure on the dollar, given some of his policy positions, such as tariffs and other initiatives,” said Jun Bei Liu, portfolio manager at Tribeca Investment Partners Pty Ltd.

Although the dollar has gained about 2% since the November 5 election, December is traditionally a month that brings losses for the currency. The dollar has fallen in eight of the past 10 Decembers, often due to annual portfolio rebalancing and the so-called “Santa rally,” which prompts traders to swap dollars for riskier assets like stocks.

Global events and their impact on markets

This year, the likelihood of sudden price swings is even greater, with the risk of Trump’s social media posts shaking markets. The month includes nine major central bank meetings and a slew of key economic data.

In Asia, stocks rose on Monday, buoyed by signs of economic stabilization in China. According to a private survey, manufacturing activity in China, the world’s second-largest economy, grew for a second straight month in November.

The data from China also supported oil prices, while a stronger dollar led to a decline in gold prices.