European markets brace for political changes and economic indicators

Global markets are set to open on a cautious note as investors weigh up the implications of France’s latest election. Polls show the left-wing New Popular Front alliance has secured a significant number of seats but not a majority, suggesting political uncertainty ahead.

President Emmanuel Macron’s centrist group and Marine Le Pen’s far-right party also won significant seats, but analysts predict Macron will seek cooperation with the left. The real test will come in the fall with the presentation of the 2025 budget, which is unlikely to resolve France’s fiscal problems.

That uncertainty has put pressure on the euro and French bond futures. But positive sentiment in stocks remains, fueled by expectations of a rate cut by the Federal Reserve after weak June jobs data. Federal Reserve Chairman Jerome Powell and other officials are scheduled to make public comments this week that will be key to determining market direction.

As earnings season gets underway, major companies like JPMorgan Chase, Citigroup, Wells Fargo, PepsiCo and Delta Air Lines will release their results. Key economic data, including German trade data and the Euro Zone Sentix index, are also on the radar, shaping investor sentiment in the coming week.

(Disclaimer: Based on information obtained from the agency.)