After Donald Trump’s surprise election in the US and the Brexit vote in the UK, a lot was at stake in the Netherlands for the first European election of the year. Until recently, Geert Wilders’ anti-immigration Freedom party had led the polls, but eventually Dutch voters embraced liberalism rather than populism. Prime Minister Mark Rutte’s centre-right VVD party came in first and won 33 out of 150 seats in the Tweede Kamer, the lower house of the parliament of the Netherlands. He will need a coalition with at least three other parties as parliamentary seats are allocated in exact proportion to a party’s vote share. Geert Wilders’s populist Freedom party, who won only 20 seats, will be excluded from this governing coalition.

The next high-stake elections in Europe will be held in France this week. Marine Le Pen’s xenophobic Front National should face the same fate as Geert Wilders’s Freedom party. Front National will probably loose Presidential and Legislative elections, proving that pro-EU and liberal ideas are not old-fashioned. As shown in polls, Marine Le Pen might win the first round of the 2017 French Presidential election on 23 April, but she will not obtain an absolute majority, therefore a run-off election between her and the second best candidate will take place on 7 May. As her father in 2002, she will almost certainly fail to win this second round regardless of her opponent.

The former investment banker Emmanuel Macron from the social liberalist movement En Marche, and the ex-Prime Minister François Fillon from the right-wing party Les Républicains, both hope to come in second and qualify for the second-round run-off. Until recently they were the only serious challengers, but the far-left candidate Jean-Luc Mélenchon, who wants to renegotiate France’s relationship with the EU, is now performing strongly in the polls. The Financial Times poll of the polls ranked him fourth, 4 and 1 percentage points behind Emmanuel Macron and François Fillon, respectively. In The Economist’s modeling his simulated probability of reaching the second round has climbed to 29%, from 2% in late February.

While the probability is still slim, having the far-left and the far-right head to head in the second-round run-off would be a shock result, especially for the markets which are showing signs of uneasiness. Two risk barometers are now flashing: the volatility in the euro against the yen and dollar and the spread between French and German 10-year yields. Using the Thomson Reuters DataStream’s scale, the Euro one-month volatility against the Yen, a most favored haven asset, is now above 18 from 8 mid-March, the highest point since 2011. Recently, the Euro has plummeted from ¥122 to ¥116, a 6% decrease. The Euro one-month volatility against the Dollar averaged at 7 mid-March, it is now moving towards 14, as high as when the UK voted to leave the EU. The worst case scenario for the European currency would be Ms Le Pen’s triumph on 7 May: it could decline to as little as $0.98 as forecasted by J.P.Morgan. The European currency has already dropped from more than $1.09 at the end of March to $1.07 today.

Another indicator of the markets’ nervousness is the widening spread between French and German 10-year yields: for traders it is an excellent measure of how much discomfort the election provokes. It went from 22 basis points in late September 2016, to a peak of 87 basis points in early February 2017, to 77 basis points today. February, March and April 2017 levels haven’t been seen consistently since 2012 in the wake of the European debt crisis. Basically, investors are asking a premium to own French bonds instead of German debt, trying to price the French political risk.

On the other hand, according to J.P.Morgan analysts a victory for Emmanuel Macron or François Fillon could send the euro to $1.15 and create a strong appetite for European assets. Even if her final challenger is Mr Macron or Fillon, markets will get a little jittery after the first round if Marine Le Pen were to come in first, but it will be the right time for investors to think about their asset allocation. In keeping with the week to 29 March, when European stock fund managers received $1.5bn, investors will certainly continue to shift from expensively valued US shares towards European stocks funds that will look very attractive. If the far-left and the far-right are into the second-round run-off then it will be another story. More turbulent.