European stocks and euro tiptoe higher on French vote outcome

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LONDON :European stocks as well as the euro staged a nervous rally on Monday as the far right took a smaller lead in the first round of France's election than some expected, suggesting a hung parliament could result and hamper the party's agenda.

FILE PHOTO: The Euronext stock exchange is pictured at the La Defense business district in Paris, France, September 30, 2022. REUTERS/Benoit Tessier/File PhotoLONDON :European stocks as well as the euro staged a nervous rally on Monday as the far right took a smaller lead in the first round of France's election than some expected, suggesting a hung parliament could result and hamper the party's agenda.

French 10-year government bond prices however reversed earlier gains, pushing yields up by 4 basis points to 3.33 per cent, their highest since November, in a sign of continued nervousness about political risks in the country. Exit polls showed Marine Le Pen's National Rally winning around 34 per cent of the vote, comfortably ahead of leftist and centrist rivals. But the chances of the eurosceptic, anti-immigrant RN winning power next week will hinge on the political dealmaking by its rivals over the coming days.

In Asia, the MSCI's broadest index of Asia-Pacific shares outside Japan hovered in flat territory in a subdued start to the second half of the year, having risen 7 per cent so far in 2024.U.S. stock index futures edged higher ahead of manufacturing PMI data, with the focus also on U.S. labor market numbers later in the week that will be parsed for clues on the Federal Reserve's monetary policy path.

Still, markets are clinging to expectations of at least two rate cuts from the Fed this year with a cut in September pegged in at 63 per cent probability, the CME FedWatch tool showed.

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