Asian stocks traded without clear direction on Monday as investors assessed the timing and likelihood of interest rate cuts by the U.S. Federal Reserve.

The euro gained following the first round of early elections in France, where the far-right National Rally (RN) party secured a significant share of the votes, though it fell short of some earlier forecasts.

The election results introduced uncertainty into global markets, particularly as both the far-right RN and the left promised significant spending increases amid France's already high budget deficit, raising concerns within the EU about financial discipline.

On Monday, the euro rose by 0.32% against major currencies, while futures on European stocks increased by 1%, and French OAT bond futures grew by 0.15%. Despite initial relief that the election outcomes were better than expected, market sentiment remained cautious as investors awaited developments leading up to the final round of voting next Sunday.

Market focus is now fully on the upcoming second-round elections and the strategic maneuvers of political parties across all French constituencies. The outcome remains uncertain and could still lead to significant consequences for European markets depending on the balance of power that emerges.

"Investors are concerned that if the National Rally secures a majority in the French parliament, it could set the stage for a clash with the EU, potentially destabilizing European markets and sharply impacting the euro," commented Vasu Menon, Executive Director of Investment Strategy at OCBC.

The broadest MSCI index of Asia-Pacific shares outside Japan in the Asian session on Monday rose by 0.07%. Japan's Nikkei increased by 0.57%, reflecting cautious optimism among regional investors amidst ongoing global uncertainty.

Investors continue to focus on the trajectory of the Federal Reserve's monetary policy following Friday's data showing stable U.S. inflation rates for May, which strengthens expectations of potential rate cuts in the coming months.

Asian stocks traded without clear direction on Monday as investors assessed the timing and likelihood of interest rate cuts by the U.S. Federal Reserve.

The euro gained following the first round of early elections in France, where the far-right National Rally (RN) party secured a significant share of the votes, though it fell short of some earlier forecasts.

The election results introduced uncertainty into global markets, particularly as both the far-right RN and the left promised significant spending increases amid France's already high budget deficit, raising concerns within the EU about financial discipline.

On Monday, the euro rose by 0.32% against major currencies, while futures on European stocks increased by 1%, and French OAT bond futures grew by 0.15%. Despite initial relief that the election outcomes were better than expected, market sentiment remained cautious as investors awaited developments leading up to the final round of voting next Sunday.

Market focus is now fully on the upcoming second-round elections and the strategic maneuvers of political parties across all French constituencies. The outcome remains uncertain and could still lead to significant consequences for European markets depending on the balance of power that emerges.

"Investors are concerned that if the National Rally secures a majority in the French parliament, it could set the stage for a clash with the EU, potentially destabilizing European markets and sharply impacting the euro," commented Vasu Menon, Executive Director of Investment Strategy at OCBC.

The broadest MSCI index of Asia-Pacific shares outside Japan in the Asian session on Monday rose by 0.07%. Japan's Nikkei increased by 0.57%, reflecting cautious optimism among regional investors amidst ongoing global uncertainty.

Investors continue to focus on the trajectory of the Federal Reserve's monetary policy following Friday's data showing stable U.S. inflation rates for May, which strengthens expectations of potential rate cuts in the coming months.