A look at the day ahead in European and global markets from

Kevin Buckland

Washington largely steals the spotlight from today, even

with post-French-poll horsetrading at fever pitch.

Fed Chair Jay Powell kicks off two days of a semi-annual

Congressional testimony with an appearance before the Senate

later on Tuesday.

Inflation was a worry at the start of the year, but it's

been cooling lately, while the jobs market is showing signs that

months of tight policy is taking its toll.

Traders will be watching for how Powell walks that tightrope

between risks of reigniting price pressures while not creating

unnecessary hardship for the voting American worker.

The day after Powell's testimony concludes, Thursday brings

the latest reading on consumer prices - which is probably the

opposite order of events to what investors, and maybe Powell

too, might have preferred.

Question marks also hang over the U.S. presidential election

in November.

Incumbent Joe Biden keeps insisting he's staying in the

race, even as his rivals and the media keep looking for reasons

he should be retiring.

Biden at least seems to be winning over the bookmakers: odds

of him running rose 13 cents to be 54 cents on the dollar, while

odds on Kamala Harris replacing him fell by the same amount to

30 cents, from pretty much neck-and-neck at the weekend.

Donald Trump may remove an unknown from his bid to retake

the White House on July 15, the start of the Republican

convention, when he could name his running mate.

In France, with the vote essentially split across the three

parties that span the political spectrum, it's hard to imagine

what an eventual government might look like.

Even the winners of the vote, the leftist New Popular Front

(NFP), was a hastily cobbled together alliance aimed at

thwarting the rise of the far-right National Rally (RN).

That it did, taking a leading 182 seats in parliament to the

RN's 143, while President Emmanuel Macron's centrist Ensemble

Alliance took 163 seats.

What seems certain is a period of political paralysis and a

decline in France's clout in Europe. But it also avoids the

outcome markets had feared most, of fiscal profligacy by the far

right.

The euro swung between extremes on Monday, but with the dust

now settling, the shared currency is sitting close to a

four-week high.

No major macro events are scheduled for Europe on Tuesday,

with the most notable releases being June CPI readings from

Greece, Hungary and the Netherlands.

Key developments that could influence markets on Tuesday:

-Greece, Hungary, Netherlands CPI (June)

-Fed Chair Powell testimony to Senate

(Editing by Muralikumar Anantharaman)