Beyond commodities, investors are enraptured by what comes next in the French political world where President Emmanuel Macron faces growing pressure to resign or hold a snap parliamentary election.
France was engulfed in further political chaos earlier this week after its fifth prime minister in less than two years resigned. Markets have taken fright, with the risk premium on French government bond yields near a nine-month high.
The euro has been under pressure and that has provided some respite to the dollar even as the U.S. shutdown enters its eighth day.
The Japanese yen slipped further, taking its losses to over 3% in just three sessions. The yen is back where it was in mid-February, hovering around the 152.50 per dollar level as whisper-it-quietly intervention risks emerge.
The market reaction to fiscal dove Sanae Takaichi's victory has been explosive, as the yen crumbled, the Nikkei rocketed to record highs and long-end bond yields surged on fiscal health worries and on receding bets of another rate hike this year.
And yet, there has been very little to take cues from what the fiscal policy path will look like in the near term. Her stance has been relatively softer than last year and investors are hoping that the next rate hike will be delayed but not denied.
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