European financial markets reacted positively to the results of the first round of the French legislative elections, alleviating concerns about unchecked government spending in Paris.

Additionally, lower-than-expected inflation in Germany fueled optimism about continued interest-rate cuts by the European Central Bank, boosting risk sentiment.

What Happened:The far-right National Rally party, led byMarine Le PenandJordan Bardella, won the first round of the snap parliamentary election with 33% of the vote.

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While significant, this result was less than some polls had...