AMSTERDAM/LONDON (Reuters) – Marine Le Pen’s far-right National Rally (RN) party won the first round of France’s parliamentary elections on Sunday, exit polls showed, but the final result will depend on days of horsetrading before next week’s run-off.

The euro opened 0.1% higher to around $1.0718 as early trading got underway in the Asia-Pacific markets.

European markets have been rattled since President Emmanuel Macron’s shock decision on June 9 to call a snap election.

The prospect of a far-right, or leftwing win has unsettled investors, as both have pledged big spending increases, which could undermine France’s already fragile finances.

COMMENTS:

PHILIP SHAW, CHIEF ECONOMIST, INVESTEC, LONDON:

“The overall results aren’t far away from most of the polls but obviously because of the electoral system, we really don’t have a very clear idea of what the seat distribution is going to be like.”

“It’s all in the balance. We may know a little bit more when we get the counts from the first round to see how many deputies have been elected in the first round and what the second-round fights are likely to be. So that might shed a little more light on the situation. But clearly, there are a number of question marks which will remain even after the result are in.”

“Much would – because we don’t know if they’ll get a majority yet – depend on how the process of cohabitation is between a potential National Rally government and Macron himself. The question still very much there.”

CARSTEN BRZESKI, GLOBAL HEAD OF MACRO, ING, FRANKFURT:

“With this result, markets are looking into another week of really high uncertainty. Probably fear, as it is still possible for RN to gain an absolute majority next week.”

“This is confirming what markets see as the most disruptive scenario.”

“I would expect another widening of the (French-German bond) spread starting tomorrow and we might even see some minor drop in the CAC 40.”

“We will have a lot coming up in the next days in terms of new polls showing what this could mean for the individual seats.”

“From the markets point of view, a win by the leftwing bloc would have been an even worse scenario, even though from the start it was very unlikely.”

(Compiled by Yoruk Bahceli and Amanda Cooper)

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