It’s a monumental week for financial markets around the world. Important economic data, including US GDP and initial jobless claims, are to be announced shortly. Investors will be watching these numbers very closely, as they will likely help establish the mood going into next week’s payrolls report. It’s not just about the United States. What’s making noise Political developments in Europe, particularly in France, are attracting lots of interest as well.
Polymarket, meanwhile, is at a jaw-dropping 94% probability. It concedes that the FTI French Prime Minister is gone from office by September. This speculation comes as a vote of no confidence looms on September 8th. This triple whammy is exacerbating political uncertainty in Europe, already heightened by Brexit. These types of events would dramatically reshape market fundamentals, as investors would be forced to reconsider what direction the leadership might take.
For the United States, next week’s initial weekly jobless claims will be a timely and informative release. New annual revisions of GDP data will give a clearer picture of the underlying health of the economy. Analysts say that last week’s continuing jobless claims reached their highest level since 2021. This unprecedented boom has raised concerns around the fragility of the labor market. These will be the three most watched economic indicators—especially since they will set the tone for what to expect from the employment numbers set to be released next week.
At the same time, European markets are on an impressive upward tear. The CAC 40 index has risen as much as 0.8%. This increase reflects a further and general strength, with the DAX and Euro Stoxx 50 up somewhat more strongly. Investor sentiment even risk William Turnier succumbed to a solid handover from Asia, where Japan’s Nikkei index jumped back more than 0.7%. This newfound momentum across Asian markets has possibly spared some of the positive optimism seen across European equities today.
The interplay between political events in France and the economic data from the US sets a complex backdrop for market participants. The upcoming vote of no confidence has the potential to create extreme volatility, especially if it leads to a political leadership change. Investors will be looking to see how any change in the political winds would change our course. They will discuss fiscal implications in relation to the impending GDP and jobless claims reports.