A look at the day ahead in U.S. and global markets by Samuel Indyk

The expected rightward shift in the European Parliament after a four-day election has still managed to jolt European markets as gains for the far-right in France prompted French President Emmanuel Macron to call a snap parliamentary election.

French bonds and stocks were sold off while the euro dropped as political uncertainty had investors heading for the exits.

French banks were some of the hardest hit, with BNP Paribas , Credit Agricole and Societe Generale all tumbling between 4.5%-7.4%.

It's a big negative shift after what had been looking like a more positive outlook for Europe.

The European Central Bank last week began lowering borrowing costs after its steepest ever tightening cycle, inflation has been drifting back towards target and surveys have indicated growth may have bottomed.

In contrast, the Federal Reserve looks like it could refrain from cutting interest rates until the fourth quarter, growth appears to be shaky - albeit after more robust growth at the start of the year - and inflation looks stickier.

So as global investors had been warming to European markets, the election results and heightened political uncertainty may bring about a shift in sentiment.

At least for now, that's evident. France's main CAC 40 stock index was down 1.9%, dragging other European markets lower. Germany's DAX, Britain's FTSE 100, Spain's IBEX and Italy's FTSE MIB were all off between 0.4%-1%.

Yet U.S. futures were relatively unperturbed. E-mini S&P futures are down around a quarter of one percent, while futures on the Nasdaq are lower by a similar amount.

French bonds are similarly as unloved as the equity market.

The spread between France and Germany's 10-year yields, a gauge of risk premium investors seek to hold French bonds over German paper, widened over 6 basis points.

The euro was down 0.4% against the dollar to its lowest level in a month.

The U.S. day looks quieter but with U.S. CPI figures and the conclusion of the Fed's June meeting on Wednesday, the week is not expected to stay that way for long.

Markets are pricing with near certainty that the Fed holds rates this week while a July cut has been almost completely ruled out too. September is now just a 50/50 shot.

A shift in tone from the Fed this week or softer CPI figures could once again have markets betting on more than one rate cut this year.

Key developments that should provide more direction to U.S. markets later on Monday:

* U.S. employment trends data

* U.S. to sell 3- and 6-month bills, 3-year notes

(Reporting by Samuel Indyk; Editing by Toby Chopra)