Political Turmoil: France's Leadership Crisis Impacts European Markets

In the midst of European and global market challenges, France is preparing for another wave of political drama. With the likelihood of needing a fifth prime minister in just three years, investors brace for potential instability in the euro zone's second-largest economy.

Francois Bayrou faces a crucial confidence vote expected to result in a loss, further complicating France's debt rating reviews this week. Following last year's downgrade by Moody's after governmental collapse, another downgrade could severely impact France's assets and worsen its fiscal stance.

Japan also joins the fray with political shifts as PM Shigeru Ishiba's resignation prompts fiscal uncertainty. The yen shows fluctuations, influencing the Nikkei's performance, while traders remain cautious about potential monetary policy shifts. These dynamics, coupled with U.S. economic signals, define a complex week for global markets.

(With inputs from agencies.)