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Marine Le Pen is intensifying pressure on Prime Minister Michel Barnier's government with threats to destabilize it unless her anti-austerity budget demands are met. In response, Barnier's administration is considering concessions, including reversing electricity tax hikes, as French borrowing costs rise to levels comparable to Greece's. The political tension is heightened by the looming return of Donald Trump, which could further complicate France's economic situation.
French bond markets are experiencing a significant sell-off, with yields surpassing those of Greece for the first time amid rising budget concerns. Meanwhile, Russia has issued threats of a hypersonic missile attack on Kyiv, and Ireland is preparing for elections. In Hong Kong, plans for a crypto tax break aimed at hedge funds and wealthy families are underway.
The Finance Ministry has proposed raising the FDI limit in insurance firms to 100% and reducing the minimum net-owned funds for foreign re-insurers from Rs 5,000 crore to Rs 1,000 crore. Additionally, the IRDAI may set lower capital requirements for companies in under-served areas, aiming to enhance policyholder security, promote market entry, and boost economic growth and employment.
Overseas investors are identifying opportunities in India's industrials, healthcare, and telecommunications sectors, despite record outflows from local shares exceeding $2 billion last month. This shift comes as global funds retreat from banks, consumer, and energy sectors, reflecting a broader trend towards investment-led growth. The recent $3.3 billion IPO of Hyundai Motor India highlights the potential in specific areas, even as overall market momentum slows.
Marine Le Pen has criticized the proposed French budget as “bad, unjust, and violent,” raising concerns about potential economic and political instability. Her actions could threaten the stability of Michel Barnier’s government and the Eurozone as a whole. Meanwhile, Brussels is set to approve spending plans for all countries except the Netherlands due to disagreements over public spending figures.
The EU plans to reduce embassy staff globally due to budget constraints, focusing on nations of primary interest. Amidst internal turmoil, leaders are struggling to formulate a unified response to the Trump presidency, with discussions on economic challenges and potential trade strategies ongoing.
Nifty is poised for consecutive monthly losses for the first time since early 2023, following a significant decline in recent gains. While Nifty futures show slight improvement, weakness in Asian and US markets suggests further losses ahead. Additionally, foreign fund withdrawals from bonds may pressure the rupee, impacting the broader economy despite potential marginal benefits for IT companies.
Wall Street banks are poised for their worst trading year since the pandemic, with projected revenues from foreign-exchange and rates trading falling significantly. Over 250 firms, including major players like Goldman Sachs and JPMorgan, are expected to generate $32 billion from Group-of-10 rates and $16.7 billion from currencies, marking declines of 17% and 9% respectively.
The dollar is poised for its largest weekly decline since August, with a 1.1% drop this week, as investors reassess the Trump trade that has previously bolstered the currency. Concerns are mounting over President-elect Donald Trump's social media activity and its potential impact on the U.S. economy. The Bloomberg Dollar Spot Index fell 0.2% on Friday, reflecting growing uncertainty in financial markets.
The yen strengthened past the significant 150 level against the dollar, driven by expectations of a narrowing yield gap between the US and Japan. Following stronger-than-anticipated Tokyo consumer price data, the currency surged nearly 1% to 149.999, marking its highest level since October. This movement was likely intensified by low liquidity due to the US markets being closed for Thanksgiving.
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