Euro Surges on French Result

A relief rally amid speculation that pro-growth centrist Emmanuel Macron will become France’s next president was offset by a selloff in Chinese shares.

The euro jumped the most in a month, though the currency pared the steepest gains that came after Macron and far-right nationalist Marine Le Pen won the first round of voting. The yen retreated and volatility ebbed, with gold dropping and 10-year Treasury yields climbing. U.S. stock-index futures rose and Japanese shares led Asian equity gains. Shanghai shares tumbled the most since January amid heightened regulatory scrutiny.

Investors have been anxiously viewing the French vote in the wake of last year’s Brexit referendum and Donald Trump’s victory in U.S. elections. The result, in which both establishment parties were eliminated, triggers a runoff on May 7 between two radically different visions of the country’s future. Le Pen, who wants to take France out of the euro and clamp down on immigration, has trailed Macron, a committed globalist, in almost every opinion poll for the runoff by a margin of some 20 percentage points.

The selloff in Chinese stocks deepened as concern grows that authorities will step up measures to crack down on leveraged trading, as authorities take advantage of a strengthening economy to reduce financial-system risk. The banking regulator said Friday it will strengthen a crackdown on irregularities in the financial sector, echoing comments by the securities watchdog just days earlier.

Here are the main market moves:

Currencies

· The euro climbed 1.2 percent to $1.0855 as of 1:54 p.m. in Tokyo. The currency soared as much as 2 percent earlier. Other European currencies rallied, with the Swedish krona jumping 1.6 percent and the Danish krone increasing 1.2 percent.

· The yen fell 0.8 percent to 110.04 per dollar, after capping the first weekly loss in three on Friday.

· The Bloomberg Dollar Spot Index slipped 0.5 percent, trading near the lowest level since the U.S. election in November.

Stocks

· Futures on the S&P 500 Index rose 0.8 percent, and contracts on the U.K.’s FTSE 100 increased 0.5 percent.

· The MSCI Asia Pacific Index advanced for a third day, gaining 0.1 percent.

· Japan’s Topix increased 0.9 percent, after its first weekly advance in more than a month. South Korea’s Kospi rose 0.2 percent. New Zealand’s S&P/NZX 50 Index added 0.3 percent and Australia’s S&P/ASX 200 gained 0.1 percent.

· The Shanghai Composite dropped 1.6 percent to the lowest since Jan. 20, after the index tumbled 2.3 percent last week. Hong Kong’s Hang Seng fell 0.1 percent and the Hang Seng China Enterprises Index was flat.

· Volatility measures slumped, with a gauge for the Nikkei 225 Stock Average falling 15 percent, the most since March 6.

Bonds

· Treasury 10-year yields rose six basis points to 2.31 percent.

· Australian benchmark yields jumped six basis points to 2.60 percent.

· The cost of insuring Asia corporate and sovereign bonds from nonpayment fell the most in five weeks.

Commodities

· Gold slipped 0.7 percent to $1,275.53 an ounce.

· Oil climbed 0.5 percent to $49.85 a barrel. Crude fell about 7 percent last week for the worst performance in more than a month. An OPEC-led committee was said to back prolonging supply cuts.

The information provided here has been produced by a third party and does not reflect the opinion of Vipro Markets. Vipro Markets has reproduced the information without alteration or verification and does not represent that this material is accurate, current, or complete and therefore should not be relied upon as such. The Information is not to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product, or instrument; or to participate in any trading strategy. We advise any readers of this content to seek their own advice. Reproduction or redistribution of this information is not permitted.

Vipro Markets Review