FILE PHOTO: A man walks past the London Stock Exchange in the City of London October 11, 2013.REUTERS/Stefan Wermuth//File Photo
The market focus in Europe was quickly shifting from the UK election - where Thursday's vote outcome was widely anticipated - to Sunday's second-round election in France. French stocks have recovered ground after they were sold off sharply following the surprise election announcement last month. The euro has benefited from renewed U.S. rate-cut speculation.
"That, in combination with weaker U.S. data, is positive for the inflation outlook and that means rate cuts are back on the cards again," he said. Zurich's Miller noted a weakening in recent employment data and said a softer-than-expected payrolls number would support the case for a U.S. rate cut in September.
"If the polls eventually prove accurate, this would mean the more extreme policies of fiscal expansion and immigration curbs are unlikely to pass," said MUFG analyst Michael Wan.