Daily Market View 03-02-2026
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France Ends a 2 Year Budget Debate as AUD Soars to 2024 High
EUR-
At long last, I can stop talking about the Dollar so much, at least in this article, as the French have at last produced a budget, following 2 years of back and forth. The deal, squeezed through the Assembly will see weaker spending cuts and tax hikes than initially hoped, keeping the deficit above 5%, similar to the UK's (-5.46%), but will make some inroads.
Sébastien Lecornu, the current French PM, will be relieved at both the job he has done and that he has avoided the fate of his two predecessors, to be gracelessly hoofed out of the role after a no-confidence vote.
The initial reaction has been muted from the Euro, but the chart above tells a more winding tale. Generally, when the spread between French and German bonds widen, investors become more frightful of French credit, the Euro weakens.
However, now that the gap is closing tighter, we can expect this to add weight to the Euro rally most are expecting this year.
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On the other side of the world, the Australians were busy, with the Reserve Bank of Australia proving to be the first G-10 bank this year to raise their interest rate. A 0.25% hike brings the Australian base rate to 3.85%, but more than this, the hawkish comments that accompanied the hike only added to AUD's rally.
On the other side of the world, the Australians were busy, with the Reserve Bank of Australia proving to be the first G-10 bank this year to raise their interest rate. A 0.25% hike brings the Australian base rate to 3.85%, but more than this, the hawkish comments that accompanied the hike only added to AUD's rally.
Gov. Michele Bullock stated that "inflation is likely to remain above target for some time", although refused to be pinned down on future hikes timings or likelihood. Regardless, its great news for those holding onto AUD, with a 16 month high against the Pound being on offer.
Markets Today
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Today's Economic Calendar
Major Economic Releases (All times in GMT)
13:00- Fed Barkin speech14:40- Fed Bowman speech
21:45- Australian CPI
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