(Reuters) – Financial markets head into a December laden with uncertainty over geopolitics, global trade and economic growth, particularly in Europe, where France is in the cross-hairs over its budget.

U.S. President-elect Donald Trump’s pledge to impose steep tariffs on Canada, Mexico and China has jolted markets and upended interest rate and inflation forecasts.

Here’s what to look out for in the week ahead, from Kevin Buckland in Tokyo, Ira Iosebashvili in New York and Dhara Ranasinghe, Karin Strohecker and Amanda Cooper in London.

1/ HOLDING ON?

Traders got a taste of what the months ahead may look like. Trump’s pledge to slap tariffs on some of the United States’ major trading partners has juiced up the dollar even more.

The greenback rose more than 1.5% against the Canadian and Mexican currencies, highlighting sensitivity to Trump-related headlines and uncertainty over his policies.

So, November ends with the biggest monthly fall in the euro since early 2022, the steepest drop in German bond yields this year, the biggest bitcoin surge since February and one of the biggest monthly jumps in U.S. stocks this year.

Now for a volatile December. Trump aside, U.S. and euro area rates are tipped to fall, Japan’s could rise. Geopolitics may bring relief (Middle East) and fear (Russia/Ukraine) as well as add political turbulence (France, Germany).

2/ IMPASSE

Tensions escalated in France over Prime Minister Michel Barnier’s proposed budget, which contains 60 billion euros in painful tax rises and spending cuts.

Far-right National Rally leader, and coalition partner, Marine Le Pen has threatened to topple the government over it and speculation is rising that this could happen by Christmas.

French bonds haven’t sold off too hard, but they’ve lagged the market so badly the premium France must pay to borrow over 10 years relative to Germany is back to 2012 crisis-era highs.

The government will try to push through the social security budget on Monday and failure to do so would trigger a no-confidence motion.

3/ TARIFF FEAR, STIMULUS FAITH Trump’s threat of new tariffs on Mexico, China and Canada hit Asian markets hard, but mainland shares have mostly shrugged off talk of a 10% levy on all Chinese imports, partly because it was lower than the 60% he campaigned on. But analysts think Beijing could produce whatever new stimulus is needed to counter the economic drag of a trade war, and several say the ultimate result will be an acceleration of China’s high-tech self-sufficiency drive. The biggest loser has been staunch U.S. ally Japan, with the Nikkei down about 1.4% since Trump’s Truth Social post, mostly led by auto stocks. Yet Honda is the top-ranking automaker after Tesla on Cars.com’s “Made in America” list, with Toyota’s Camry sedan and Highlander SUV also rating highly. Mexican factories remain a vulnerability for everyone, particularly for high-margin, top-selling pickup trucks.

4/ PRICED FOR PERFECTION

As U.S. stocks hover near record highs, investors await next Friday’s jobs report for a clearer picture of how the economy is faring ahead of the Federal Reserve’s December meeting.

Robust U.S growth has helped power stocks higher all year, even as it raises concerns of an inflationary rebound that can undo the Fed’s progress in taming consumer prices.

But another blowout jobs report, such as the one that shocked markets in October, could derail expectations for how much the Fed will be able to cut in the months ahead, potentially shaking an important pillar of the stocks rally.

Indeed, minutes of the last policy meeting showed Fed officials aren’t unanimous on how much more rates should fall.

Economists polled by Reuters expect the U.S. to have created 183,000 new jobs last month.

5/ AFRICAN FIRST

South Africa takes over the G20 presidency on Sunday, the first African country to lead the group that represents 85% of the world’s economy, 75% of its trade and 67% of its population.

President Cyril Ramaphosa wants to focus on climate change, inclusive growth, food security and artificial intelligence. But his agenda might be bumping up against the reality of trade wars and diplomatic tensions as Trump moves into the White House.

South Africa is the fourth emerging market in a row to assume the chair after Indonesia, India and Brazil, and will hand the baton to the U.S. in December 2025.

(This story has been corrected to say that the government will try to push through the social security budget on Monday, not that the Senate will debate the bill on Monday, in paragraph 11)

(Compiled by Amanda Cooper; Graphics by Vineet Sachdev, Pasit Kongkunakornkul, Kripa Jayaram and Prinz Magtulis; Editing by Alexander Smith)

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