Elections Are The Hot Topic- Europe Market Wrap

Calm returned to markets as traders saw positive implications from an inconclusive French election outcome that still kept the far right at bay. European stocks rose and the euro pared earlier losses.

S&P 500 contracts were barely changed on Monday after the index posted its largest weekly gain since April. US Treasuries have started the week on the back foot, as traders prepare for Federal Reserve Chair Jerome Powell’s congressional appearance and US inflation data this week.

A left-wing alliance received the most votes in French legislative elections over the weekend, but did not obtain enough seats to form a government. That conclusion limits how much any party can do, prompting speculation that President Emmanuel Macron may build a new coalition of the center and center-left.

In the runup to the vote, investors had been concerned about the prospect of a far-right takeover after Macron’s crushing defeat in last month’s European parliamentary elections.

In commodities, oil edged lower after four straight weekly gains, even as traders tracked twin threats to crude production posed by a hurricane in the US and wildfires in Canada. Gold was steady, and iron ore extended a decline from a one-month high.