Rather calm after another French government collapse [Video]

France’s government just collapsed after a no-confidence vote — but markets barely blinked. European markets are under some pressure this morning but the euro is holding its ground. Why are investors so calm while French politics descend into gridlock? Have the risks already been priced in, or is a sudden shock still waiting around the corner, just like the UK’s mini-budget meltdown back in 2022? Time will tell.

Meanwhile in the US, weak jobs data fuel bets on aggressive Federal Reserve (Fed) cuts — maybe even 50bp in September. Stocks hover near record highs, the dollar eases and JPMorgan warns of a looming “sell the news” reaction. Gold keeps surging on central bank demand and the rally is further backed by falling US yields and a softer US dollar, with Goldman Sachs hinting at a path to $5,000 an ounce if investors decided to convert their UST to gold. Crude oil, too, defies OPEC’s supply pledges, supported by shale breakevens and a softer dollar.