The Korean won and the stocks fell, and the volatility in broader Asian markets and cryptocurrencies was higher, but the impact remained limited, the US and European futures are set for a positive open and France could safely come back to the front of the scene with lawmakers preparing to hold a no-confidence vote today and to take Barnier’s government down.

You can’t tell that risk by looking at the CAC 40 – which closed 0.26% higher yesterday, and at the French 10-year yield – which eased to the lowest levels since fall over the last week. But the CAC 40 is set to print its biggest performance gap in three decades with the German DAX index. And the spread between the 10-year French and German papers has advanced to the highest levels since the euro debt crisis of a decade ago. This being said, the soft reaction to the French chaos is surprising.

In the US, sentiment remains cheerful and cozy at the start of December. The S&P500 consolidated gains near its ATH level, Nasdaq 100 hit a fresh record while Dow Jones diverged negatively for the second straight session. Data-wise, the latest figures released yesterday showed that the job openings in October rose more than expected by analysts.

Optimism rose too, though less than expected. Federal Reserve’s (Fed) Mary Daly said that there is no certainty that the Fed will cut the rates this month, but that, the option remains on the table. Activity on Fed funds futures gives more than 70% chance for another 25bp cut from this month’s FOMC meeting.

This week’s jobs, and next week’s inflation data will say the last word. Due today, the ADP report is expected to print lower job additions last month compared to a month ago, while the expectation for Friday’s NFP is around 200K new job additions, with slightly higher unemployment rate and slightly lower wages growth. Soft data will have no difficulty convincing the Fed doves that another 25bp is on its way this month, while a strong-looking set of data could add some suspense to the mix, but eventually, the Fed will certainly cut.

As such, the US dollar bulls prefer to sit on the sidelines, and the US dollar index consolidates around the minor 23.6% Fibonacci retracement on September to November rally. The EURUSD takes the opportunity to catch its breath before another potentially hectic session – depending on what the French politicians decide to do with Barnier and his ambition to reduce the French budget deficit toward the EU targets.

We may not see a major selloff in single currency if the French government is taken down, as that possibility must be fully priced in by now. But the pair will remain in the bearish trend below the 1.0672 level – the major 38.2% retracement – justified by the dovish European Central Bank (ECB) expectations amid the doomy economic fundamentals, the messy politics in core European countries and Trump’s tariff threats.

In Japan, the USDJPY continues to test the 100-DMA to the downside, but each attempt ends with a fresh rebound back to the 150 level. While the idea that the Bank of Japan (BoJ) could hike the rates one more time before this year ends keeps the yen bears contained, investors around the world sound unwilling to abandon their carry trade strategy, as even another rate hike in Japan wouldn’t squeeze the rate differential enough to walk out of the yen as a funding currency. That means that the yen’s recovery path won’t be smooth, and it’s good news for the global markets. The last time the yen appreciated significantly – it was during summer – the global indices were heavily hit.

In energy, US crude rallied more than 2.5% to above $70pb on news that the US will impose more restrictions on the Iranian oil exports and on chatter that OPEC is getting closer to delaying its plans to restore production by another 3 months. The decision announcement is due tomorrow. The short-term risks remain tilted to the upside, but delaying production will only prevent global oil glut from getting worse, but won’t reverse it.

As such, once the geopolitical news and OPEC decision are absorbed, the bears will be happy to return to the field. Short-term price rallies are interesting top selling opportunities. The bearish trend is valid below the $72.85pb level, the major 38.2% retracement on summer selloff.