The recent downgrade of France's credit rating by Moody's has led to a notable underperformance in French stocks and bonds, with the CAC 40 index falling 0.7% and the yield spread between French OATs and German bonds widening to 79 basis points. This downgrade has heightened the perceived risk premium for French government debt, although the broader euro area sentiment remains stable, as indicated by the euro's little change against the dollar. Meanwhile, the pound has strengthened by 0.2%, driven by a positive UK services PMI, which has overshadowed a weaker manufacturing PMI.
In the US, equity futures are on the rise, and Treasury yields have decreased by 2 basis points to 4.38%, reflecting a shift towards safer assets amid global uncertainties stemming from France's credit downgrade. The Bloomberg Dollar Spot Index has fallen by 0.1%, which has contributed to an increase in gold prices, as a weaker dollar enhances gold's appeal as a store of value. Spot gold has added $12, reaching approximately $2,660 per ounce, while Bitcoin has surged to a record high, potentially signaling increased investor risk appetite or a hedge against traditional financial systems.
The SPDR Gold Shares ETF (GLD), which aims to track the performance of the price of gold bullion, is currently trading at $245.64 as of 05:40 on December 16, up from its last close of $244.29. This movement aligns with the broader trend of rising gold prices amid a declining dollar index and heightened global economic uncertainties.