Uncertainty over the outcome of the election — combined with the policy pledges of both the left and right — now hangs over markets.
The centrist alliance — containing Macron's own Rennaissance Party — is seen coming third. Sunday's first-round vote will be followed by a run-off on July 7, and could result in a hung parliament.French bond yields — which move inversely to prices — have been relatively contained. But market-watchers have highlighted France's borrowing costs versus its neighbors', particularly Germany's.
This would see either the RN or NFP forming a government, implementing the majority of their campaign pledges and rejecting the European Union's fiscal rules — which could push the gap between French and German 10-year yields up to 300 basis points, according to Kenningham. "The comparison to the U.K. is interesting because in both cases you had a sudden decision to force voters to make a decision, and that spooks markets," Christian Keller, head of economics research at Barclays, told CNBC's"Squawk Box Europe" last week.