Euro Drops to 17-Month Low: French Political and Economic Concerns Persist, Spain May Hold Early Elections
智通财经2026/10/05 04:06(1) The euro fell to its lowest level since May 2025. Earlier reports indicated that Spanish government officials are preparing for early elections, heightening investor concerns over political and fiscal risks in Europe. (2) The euro fell as much as 0.8% against the US dollar during Asian trading, reaching 1.1161. Traders said that Asian hedge funds were selling euro against the dollar in the spot market, triggering more sell-offs after hitting key option levels, which further amplified the decline. (3) Three people close to Spanish Prime Minister Pedro Sánchez revealed that after the ruling party’s heavy defeat in last week’s parliamentary elections, several cabinet ministers, as well as senior officials in the government and the ruling Socialist Party, believe that holding early elections would be the best strategy. Since the discussions were not public, these sources requested anonymity. (4) This news came amid growing market concerns about France’s political stability and budget outlook. (5) Homin Lee, Senior Macro Strategist at Lombard Odier Singapore Ltd., said that bond and currency markets are clearly reflecting investors’ unease over the increasing instability of the French government, as well as concerns about the gradual relaxation of fiscal discipline ahead of the country’s 2027 elections.
- The euro fell to its lowest level since May 2025. Earlier reports stated that Spanish government officials are preparing for early elections, intensifying investor concerns over political and fiscal risks in Europe.
- The euro against the U.S. dollar dropped as much as 0.8% during Asian trading, touching 1.1161. Traders noted that Asian hedge funds were selling the euro against the dollar in the spot market, triggering further sell-offs once certain key option levels were breached, which amplified the decline.
- Three people close to Spanish Prime Minister Pedro Sánchez revealed that, after the ruling party suffered a heavy defeat in last week's parliamentary elections, some cabinet ministers and top officials from both the government and the ruling Socialist Party believe that holding early elections is the best strategy. Due to the confidential nature of these discussions, the sources requested anonymity.
- Before this news broke, concerns in the market over France's political stability and budget outlook were also mounting.
- Homin Lee, Senior Macro Strategist at Lombard Odier Singapore Ltd., said that both the bond and currency markets are clearly reflecting investor anxiety over the increasing instability of the French government and a gradual weakening of fiscal discipline ahead of the 2027 elections.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Goldman Sachs expects S&P 500 constituent stocks to see a 27% year-on-year increase in quarterly profits in September.
As companies make massive investments in AI infrastructure, U.S. corporations are set to usher in another strong earnings season. According to Goldman Sachs, the S&P 500 companies are expected to report a 27% year-over-year increase in earnings for the September quarter, driven by firms at the core of the AI infrastructure boom. Ben Snider, Chief U.S. Equity Strategist at Goldman Sachs, stated, "Recent macroeconomic data and signals related to the AI investment frenzy show no indication that investment is slowing down." Manish Kabra, Chief U.S. Equity Strategist at Societe Generale, said that this will mark the third consecutive quarter with profit growth exceeding 25%, an unprecedented streak outside of the post-financial crisis recovery periods. Revenue is projected to grow by 12%. Steve Chiavarone, Chief Investment Officer for Federated Hermes Equities, pointed out that thanks to capital expenditures related to AI infrastructure, investors are witnessing "the best profit and margin growth in our lifetimes." He added, "The worries that have built up... will ultimately be shattered by strong earnings performance."
Goldman Sachs expects the AI boom to drive a 27% increase in S&P 500 component stocks' September quarter profits.
According to the Financial Times, robust AI spending signals another profitable earnings season in the US, offering potential gains for investors. Goldman Sachs predicts that, driven by companies at the heart of the AI infrastructure boom, S&P 500 component companies' earnings for the September quarter are expected to increase by 27% year-on-year.
Jefferies raises ConocoPhillips target price to $174.
Jefferies raised ConocoPhillips (COP.US) target price from $159 to $174.
Japan bond repurchase program receives 1.51 billions yen bids
Japan’s bond repurchase program received bids totaling 1.51 billions yen. The average accepted spread for Japanese bond repo was -0.481 yen. The competitive bidding size for Japanese government bond repo reached 90.7 billions yen. The highest accepted spread for Japanese bond repo was -0.360 yen. The maximum accepted spread for Japanese bond repo was 16.6666%.
