The news: Political upheaval in the US, France and Japan is reverberating through markets, pushing gold to record intraday highs and edging Bitcoin over a new record.
The numbers: French stocks slid and bond yields rose after Prime Minister of France Sebastien Lecornu resigned after less than a month in office. The CAC 40 Index fell 1.8%, led by banks Societe Generale, BNP Paribas and Credit Agricole after the news broke on Monday morning local time in Paris. Borrowing costs rose as bond prices fell. The yield on the French 10-year government bond jumped nearly 0.1 percentage point to 3.59%.
The price of Bitcoin climbed to near record highs, after surging above USD125,660 ($190562) over the weekend. The cryptocurrency which is up more than 30% this year was trading up 1.1% at USD123,981 Monday morning London time (10:00pm AEST).
Gold rose to a fresh high on Monday, nearing USD4,000 an ounce. The metal jumped 1.5% to clear USD3,945 an ounce.
The context: Growing fiscal concerns across some of the world’s biggest economies are prompting investors to move toward the perceived safety of gold and Bitcoin while pulling away from major currencies.
Expanding debt in the US, Japan and Europe is boosting the appeal of the alternative assets which are climbing to new highs.
In the US, expectations that the Federal Reserve will lower interest rates have contributed to investors piling into risky assets, with Cantor Fitzgerald analysts writing on Sunday that a broad move higher in crypto began last week after Congress failed to approve a spending bill, leading to the government shutdown, the WSJ reports. The US government shutdown also has markets on edge and continues to drag on the US dollar.
Earlier on Monday, Japan’s Nikkei high an all-time high as stocks surged 4% after fiscal and monetary dove Sanae Takaichi was elected as leader of the ruling party.
