European Opening Session – 24/04/2017 – by Arjun Lakhanpal

In Asian Equity Markets Japan’s Nikkei share average rose to a near three-week high on Monday with broader investor risk sentiment improving after centrist Emmanuel Macron took a step towards the French presidency after the weekend’s voting. The Nikkei was up 1.4 percent at 18,878.31 after rising to 18,910.33, its highest since April 5. The broader Topix gained 1.1 percent to 1,504.37 and the JPX-Nikkei Index 400 was also 1.1 percent higher, at 13,467.50. MSCI’s broadest index of Asia-Pacific stocks outside Japan edged up 0.2 percent. Shanghai stocks fell 1.5 percent after state media signaled Beijing would tolerate more market volatility as regulators clamp down on riskier financing.

In Currency Markets the euro pared gains after scaling a five-month high against the dollar on Monday after the centrist candidate won the first round of the French presidential election, reducing the risk of an anti-establishment shock in the final round. The euro was up 1.1 percent at $1.0844 by midday in Asia after earlier rising as high as $1.0940, its highest since Nov. 10. Against the yen, the euro jumped 2.1 percent to 119.34, after touching a one-month high of 120.935. The dollar was up 0.8 percent at 110.03 yen, rising above the 110-yen level for the first time in nearly two weeks and logging an earlier high of 110.64. The dollar index fell 0.8 percent to 99.179.

In Commodities Markets oil prices recovered ground on Monday following last week’s big losses, driven by expectations that OPEC will extend a pledge to cut output to cover all of 2017, although a relentless rise in U.S. drilling capped gains. U.S. West Texas Intermediate crude oil futures added 0.5 percent, but were still below the $50 mark pierced on Friday at $49.88 a barrel. Brent crude futures rose 0.6 percent, to $52.26 per barrel. Spot gold was down 0.9 percent to $1,273.15 per ounce. Bullion prices touched a low of $1,265.90 earlier in the session, the lowest since April 11. U.S. gold futures were down 1.1 percent at $1,274.70 an ounce.

In US Equity Markets  stocks fell on Friday as investors were cautious ahead of the first round of the closely contested French presidential election, but the S&P 500 managed to notch its first weekly gain in three. The Dow fell 0.15 percent, to 20,547.76, the S&P 500 lost 0.30 percent, to 2,348.69 and the Nasdaq Composite fell 0.11 percent, to 5,910.52. General Electric fell 2.4 percent after the company reported negative cash flow from its industrial operations in the first quarter. Schlumberger lost 2.2 percent. The oilfield services provider warned that margins would remain under pressure as it spends more to bring back idled equipment. Mattel fell 13.6 percent after the toymaker reported a bigger-than-expected quarterly loss.

In Bond Markets treasury debt futures prices fell on Sunday after centrist Emmanuel Macron took the first round of voting in the French presidential election. Ten-year notes futures last fell 25/32 in price, indicating the yield in the cash market is set to jump. The spread between French 10-year government bond yields and their German equivalents has been a key gauge of investor sentiment around the French election in recent months.  That gap was widely expected to narrow on Monday as investors buy back into French debt, and as safe-haven German Bunds are sold off on higher risk appetite.