Europe's two largest economies, France and Germany, are likely to have months of political chaos amid a weak economic backdrop and rising trade tensions with the U.S. and China.

France's minority government is heading for a collapse as early as this weekend, as the far-right National Rally announced its plans to push for a no-confidence vote. The Euro Area's manufacturing activities deteriorated further, and the UK's home price increase accelerated in November. 

Market indexes in Europe were generally unchanged in November, but the CAC-40 index plunged more than 4% amid rising political instability. Eurozone inflation accelerated in October. Swiss GDP growth slowed in the third quarter.

European market indexes advanced, but gains were capped amid worries of political instability in France as three political groups struggled to compromise on the financial budget. 

French lawmakers struggle to strike a compromise and pass the next fiscal year budget, and deep divisions could lead to the fall of the government.

U.S. trade protectionism and political instability in France and Germany added to the ongoing geopolitical tensions rooted in the Russia-Ukraine conflict. 

Stock market indexes in Europe advanced, the euro hovered near a three-year low, and bond yields edged lower amid rate path worries and a weakening economic backdrop.



The euro dropped to a two-year low after business activities across the eurozone contracted following the weakness in the previously resilient service sector. Rising geopolitical tensions, policy uncertainty, and growing trade tensions with the U.S. and China also contributed to market jitters.

European markets halted a three-day slide after tensions between the U.S. and Russia appeared to ease. Germany's producer price deflation extended to the sixteenth month in a row in October. The UK's consumer price inflation accelerated in October. 

Bond yields in the Euro Area edged lower after Russia-Ukraine conflict escalation worries dominated stock and bond market trading. Switzerland's trade surplus soared to a record high in October.

European stock market indexes traded in a tight range amid worries of rising trade tensions with China and the U.S. Rate path worries also weighed on the market as investors debated timing and the size of future rate cuts. The Euro Area goods trade surplus widened in September.

Benchmark indexes in the eurozone fell between 1% and 2% as investors worried about the rising trade tensions with the U.S. and Europe and uncertainty about NATO financing in 2025 following the U.S. elections and political instability in Germany. 

Eurozone GDP growth in the third quarter was reconfirmed in the second estimate. France's jobless rate edged slightly higher to 7.4%.

ASML
The return of Donald Trump to the White House may prove to be mixed blessings for the European Union, as his administration will demand more payment for the support of NATO, erect trade barriers for goods from the region, and push to end the war in Ukraine.



European markets traded in a tight range as investors reviewed the latest batch of underwhelming earnings. The central banks of the U.S., U.K., Sweden, and Norway are set to announce their rate decisions later in the week.