Market Volatility Soars as France's Debt Hits Record Highs

Global markets are facing a perfect storm of high borrowing costs, central bank rate hikes, and political turmoil. France's minority government has presented its 2027 budget bill, which could lead to weeks of wrangling over spending cuts in a deeply divided parliament.

The country's debt as a share of economic output is at a record high of almost 120%, and it plans to sell a record €340 billion in bonds next year. The Bank of France chief says the country cannot count on the ECB to fix its debt problems, but the ECB is watching closely.

Currency markets are breaking out of their summer hibernation, with the dollar set to gain and the euro set to struggle. The dollar index has risen for a third straight week, reaching its highest level in 18 months.

Meanwhile, Brazil goes to the polls on Sunday in an election that will show whether Latin America's biggest economy joins the rightward political shift seen across much of the region or carves its own path.