Wall Street is set to open lower on Friday morning, with renewed concerns over the political crisis in Europe likely to weigh on early trading.

Half an hour before the opening, New York index futures were down 0.2% to 0.7%, heralding a start to the session in positive territory.

Hitherto unaffected by European tremors, US equity markets are likely to be caught up in the political uncertainty that is shaking the Old Continent, and which took a new turn today.

European financial markets abruptly accentuated their decline on Friday, with the CAC 40 currently down 2.3% in Paris. In Frankfurt, the DAX lost 1.2%, while the Euro STOXX 50 shed over 1.6%.

The markets fear that the uncertainty surrounding the outcome of the forthcoming legislative elections, with the RN or the new Front Populaire possibly coming to power accompanied by possible budgetary slippage, will lead investors to shy away from French assets.

The political instability in France is a setback for the pro-European consensus", worry Barclays' strategists.

"We recommend caution, as the uncertainty could last", they warn.

But beyond France, the current crisis could deteriorate at any moment due to the budgetary difficulties experienced by other eurozone countries, led by Italy.

The yield on French 10-year OATs has eased to 3.10%, but the spread with the benchmark German rate has now reached 75 basis points, illustrating investors' mistrust of French debt.

"It's true that spreads on rates have tended to widen, but the risks of a systemic-type problem appear limited for the time being", comments Andrew Kenningham, economist at Capital Economics.

As usual, Wall Street's financial stocks, which are most exposed to the risk of a contagion effect, are likely to suffer.

Fears about the political situation in Europe are likely to overshadow improving US economic data.

In terms of indicators, import prices fell by 0.4% in May compared with the previous month, confirming the disinflationary trend observed in the statistics published this week.

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