A look at the day ahead in European and global markets from Kevin Buckland
How well France's hastily assembled anti-far-right front is working will become clear today, with candidates having until Tuesday evening to drop out of Sunday's crucial second-round vote to leave only those with the best chance of winning.
Following the anti-immigrant, eurosceptic National Rally's (RN) strong showing in the first round last weekend, the priority among its rivals is preventing Marine Le Pen's party from taking a majority.
That means fielding only the best-placed rival to the RN's candidate, irrespective of party - even if that candidate is from the equally divisive far-left France Unbowed (LFI) party.
Currently, the market's base case appears to be a hung parliament, although it would also risk political paralysis for the remainder of President Emmanuel Macron's tenure to 2027.
Stocks rallied, particularly in France where the CAC 40 jumped more than 1%. Some payback might be the immediate reaction on Tuesday morning, with pan-European Stoxx 50 futures pointing down about 0.1%.
The euro remains firm, even in the face of renewed dollar strength. Other greenback rivals are not proving so resilient, particularly the yen, which is still languishing close to a 38-year trough, keeping traders of high alert for another round of official Japanese intervention.
The dollar-yen pair is particularly sensitive to long-term U.S. yields, which have spiked amid the growing risk of a second Donald Trump presidency, which traders and analysts equate with higher tariffs and bigger spending.
The U.S. currency and yields are also elevated based on the idea that Federal Reserve policy isn't going to loosen at an accelerated pace, with inflation still pretty sticky and the job market quite tight.
A parade of potentially crucial employment data begins on Tuesday with the JOLTS job openings report, a Fed favourite, followed by ADP (NASDAQ:ADP) numbers a day later and the all-important monthly payrolls figures on Friday.
Fed Chair Jerome Powell has the opportunity to present his latest take on the economy when he participates in a panel at an ECB forum in Sintra, Portugal, later in the day.
The data calendar is fairly light for Europe, with euro-area flash inflation figures for June and the jobless rate for May.
Elsewhere, Big Tech may be wondering who's next in the European Commission's crosshairs, after Meta Platforms was charged with antitrust breaches on Monday.
Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) were both targets of the regulator last month over App Store rules and the bundling of Teams with the Office 365 suite, respectively.
Nvidia faces its first-ever anti-trust charges, with sources telling Reuters that French regulators are preparing to charge the AI poster child with anti-competitive business practices.
Key developments that could influence markets on Tuesday:
-Deadline for candidacy in French election's second round
-Euro-zone flash HICP (June), jobless rate (May)
-US JOLTS (May)
-Fed Chair Jerome Powell speaks at ECB forum