Market Roundup
• US National Activity Index Mar 0.08vs 0.27 previous.
• US Dallas Fed Mfg business Index Apr 16.80 vs 16.90 previous.
• Macron seen beating Le Pen in 2nd round of French election with 64 percent of votes - Elabe poll.
• Fed's Kashkari: infrastructure spending not key to US growth.
• French yields slide on election relief; FR-DE 10-yr yield gap at tightest since Dec, 2-yr yield gap halves from Friday.
• Euro Zone money markets see more chance of ECB hike in early 2018 after French vote, Mar 2018 EONIA at -30bps.
• Weak pound boosts UK exporters, but Brexit weighs on investment –CBI.
• Oil slips, despite talk of OPEC output cut extension through 2017, investors fret about rising US drilling.
• Gold, USTs slide, USD dips after French election revives risk appetite, end North American off worst of the day.
• White House: negotiations continue with congress over border wall funding.
Looking Ahead - Economic Data (GMT)
• No significant data
Looking Ahead - Events, Other Releases (GMT)
• No significant events
Currency Summaries
EUR/USD is likely to find support at 1.0815 levels and currently trading at 1.0868 levels. The pair has made session high at 1.0872 and hit lows at 1.0832 levels. Euro rose against the dollar on Monday on relief over Emmanuel Macron's victory against anti-euro nationalist Marine Le Pen in the first round of France's presidential elections. The euro was last 1.2 percent higher against the dollar at $1.0865, not far from the 5-1/2-month high of $1.0935 it reached after the initial indications from the Sunday vote gave victory to Macron, as predicted by weeks of polling. The same polls showed Macron defeating Le Pen by as much as 30 percentage points in two weeks' time, suggesting players can buy back into the currency. Sunday's outcome reduced the prospect of an anti-establishment shock on the scale of Britain's vote last June to quit the European Union and the election of Donald Trump as U.S. president.
GBP/USD is supported in the range of 1.2700 levels and currently trading at 1.2792 levels. It reached session high at 1.2799 and dropped to session low at 1.2770 levels. Sterling fell against the dollar on Monday as the dollar was buoyed by France's presidential election first-round win for the market's preferred candidate. Uncertainties surrounding the French vote cooled with traders starting to look past the global risk event after Centrist Emmanuel Macron, a pro-EU and former economy minister won the first round of voting and qualified for the May 7 runoff alongside far-right leader Marine Le Pen. Investors were concerned a victory for Le Pen could eventually put France on the path taken by Britain to leave the European Union. The vote result pushed sterling lower, the pound reversed some of its last week's gains versus the dollar to trade down 0.1 percent on the day at $1.2805.
USD/CAD is supported at 1.3404 levels and is trading at 1.3505 levels. It has made session high at 1.3520 and lows at 1.3440 levels. The Canadian dollar lost ground against its U.S. counterpart on Monday as oil fell and the dollar was buoyed by France's presidential election first-round win for the market's preferred candidate. Centrist Emmanuel Macron took a big step towards the French presidency on Sunday by winning the first round of voting and qualifying for a May 7 runoff alongside far-right leader Marine Le Pen. Oil prices continued to decline after last week's selloff, on lack of confirmation that OPEC will extend output cuts till the end of 2017 and as Russia indicated it can lift output if the deal on curbs lapses. On the data front, Canadian wholesale trade declined in February after four months of gains amid weakness in the household goods and food sectors, data from Statistics Canada showed. The 0.2 percent decrease was not as steep as the 1.0 percent decline economists had forecast. Sales volumes fell 0.4 percent. The Canadian dollar was last trading at C$1.3510 to the greenback, slightly weaker than Friday's close of C$1.3503.
AUD/USD is supported around 0.7521 levels and currently trading at 0.7560 levels. It hit session high at 0.7567 and made session lows at 0.7555 levels. The Australian dollar declined against US dollar on Monday as the Australian dollar was weighted down by fall in oil prices and investors unwound hedges following a keenly-watched French election in which centrist Emmanuel Macron swayed to victory in the first round. Centrist Emmanuel Macron took a big step towards the French presidency on Sunday by winning the first round of voting, with the latest opinion polls showing him as strong favorite to beat far-right candidate Marine Le Pen in the final run-off. The news represented a defeat for anti-European Union forces on the right and left of French politics, sent European shares and the euro vaulting higher. On the data front, the next big event is Australia's first-quarter inflation due on Wednesday. Headline consumer price inflation is expected to accelerate to 2.2 percent, mostly on temporary factors, with underlying inflation remaining subdued at 1.8 percent. Tepid consumer prices is one of the key concerns of the Reserve Bank of Australia (RBA), which has left interest rates at a record low 1.50 percent after last easing in August 2016.
Equities Recap
European shares rallied, banks soared, and French blue-chips briefly hit a nine-year high on Monday after France's presidential election sparked a rush to risky assets.
The UK's benchmark FTSE 100 closed up by 2.1 percent, FTSEurofirst 300 ended the day up by 2.13 percent, Germany's Dax ended up 3.3, and France’s CAC finished the day up by 4.1 percent.
U.S. stocks rallied on Monday, tracking a relief rally that swept through Asian and European markets after centrist candidate and market favorite Emmanuel Macron won the first round of the French presidential election.
Dow Jones closed up by 1.05 percent, S&P 500 ended up 1.08 percent, Nasdaq finished the day up by 1.24 percent.
Treasuries Recap
U.S. Treasury debt prices fell on Monday after centrist Emmanuel Macron's victory in the first round of France's presidential race bolstered expectations the country would stay in the European Union and preserve the euro.
The 10-year yield briefly dipped to 2.165 percent last week, the lowest since Nov. 10. The notes had struggled to hold below strong technical resistance at yields of around 2.19 percent.
U.S. 30-year bond prices were down 23/32, yielding 2.930 percent, up from Friday's 2.894 percent. Thirty-year yields earlier touched a two-week peak of 2.964 percent.
On the front-end, U.S. two-year yields were also up at 1.233 percent, from 1.184 percent last Friday.
Commodities Recap
Gold fell more than 1 percent on Monday after the market's favored French presidential candidate won the first round of the country's election, but prices pared losses as U.S. Treasury yields came off their highs.
Spot gold was down 0.7 percent at $1,275 an ounce by 3:19 p.m. EDT (1919 GMT), having touched its lowest in nearly two weeks at $1,265.90. U.S. gold futures settled down 0.9 percent at $1,277.50.
Oil prices slipped nearly 1 percent on Monday, extending last week's decline, on lack of confirmation that OPEC will extend output cuts until the end of 2017 and as Russia indicated it can lift output if the deal on curbs lapses.
Brent crude futures ended the session 36 cents lower at $51.60 per barrel after hitting a session high of $52.57 a barrel.
U.S. West Texas Intermediate (WTI) crude oil futures dropped 39 cents to settle at $49.23 a barrel, after reaching a high of $50.22 a barrel earlier in the day.
