Crypto News: 5 things to start your day: Europe

Good morning. Joe Biden stumbled through exchanges in the presidential debate. Traders are bracing for French legislative elections at the weekend. Nike's shares sink and L'Oreal sees slower growth for the beauty market. Here's what people are talking about.

President Joe Biden and former President Donald Trump faced off in their first 2024 debate late Thursday in the US. The dollar and Bitcoin rose as the debate got going and the yen is a tad weaker trading around 161 per dollar. Investors will turn their focus to the Federal Reserve's preferred inflation gauge due Friday. Stocks rose in Asian trading along with European equity-index futures while US Treasuries retreated.

For instant reaction on the CNN presidential debate, listen here.

Speaking of political risks, investors have a lot on their plate already. Over in Europe, all eyes will be on the first round of French legislative elections. Traders are going into the parliamentary election at the weekend holding the most futures contracts on French bonds in at least a year, a sign they're betting yields will go higher. Before France, Iran holds a snap presidential election on Friday. And next week the UK general election is coming up.

We have some downbeat soundbites from the corporate world. Nike shares sank after the world's largest sportswear company issued a full-year outlook that missed expectations. Over in Europe, L'Oreal expects slower growth for the overall beauty market this year, according to its CEO, as weakness in China weighs on sales after years of rapid gains.

Nokia has agreed to acquire Infinera in a transaction valuing the maker of optical telecommunications equipment at $2.3 billion including debt. The cash-and-stock deal will value Infinera at $6.65 a share, a 37% premium to the trailing 180-day average of the San Jose, California-based company's share price, according to a statement Thursday. The acquisition is the largest for Nokia since its biggest-ever deal, the €10.6 billion ($11.4 billion) takeover of Alcatel-Lucent completed in 2016.

India is set to lure billions of dollars more inflows as JPMorgan is set to add the nation's government bonds to its emerging markets index starting Friday. Global funds have already poured close to $11 billion into index-eligible bonds since JPMorgan's announcement in September. India's debt has become a favorite among emerging market investors, attracted to the country's robust economic growth and a stable currency. The US bank expects $20 billion to $25 billion to come in over the next 10 months.

On today's calendar, we have ECB consumer expectations survey and inflation data from countries including France, Italy and Spain, as well as unemployment figures out of Germany and Norway. Also due are final GDP numbers for the UK and Sweden retail sales. The EU Summit continues in Brussels. For central bankers, the ECB's Villeroy and Riksbank's Bunge speak, as well as the Fed's Barkin.

This is what's caught our eye over the past 24 hours.

Goldman signals end of an era in private equity with a big hire
Baupost cuts almost a fifth of investing staff in record cull
Japan's Mimura to succeed Kanda as currency czar
Tesla's design changes confuse drivers and undercut EV quality
Balyasny, Schonfeld cut merger arb traders after bad bets
Hong Kong stumbles in its own key test as a global financial hub
Chewy, Petco shares swing as 'Roaring Kitty' posts dog image

The French bond market will get a much-needed relief ahead of the first round of parliamentary elections this weekend if CPI figures out of France and ECB inflation expectations this morning come in softer.

Concerns are escalating over the country's fiscal deficit and debt sustainability under a potentially new government, keeping French bonds in the eye of the storm. As one of the largest EU countries in breach of the bloc's 3% budget limit, prospects of further fiscal bloating from either the far-right or left parties have widened spreads between German bunds and French OATs. This angst will linger unless they placate these concerns.

While election risks remain top of mind, progress on inflation will be crucial in bringing some calm across fixed income. Resilient prices cloud the trajectory for ECB interest-rate cuts and ensuring progress on inflation has held them back from providing a forward guidance. The OIS market is pricing in about two more rate reductions this year.

With France's budget under scrutiny and bond vigilantes on the prowl, monetary easing is now more important than ever in keeping investor concerns at bay. Inflation just needs to cooperate.

Mary Nicola is a macro strategist for Bloomberg's Markets Live team and is based in Singapore.