Article / 25 April 2017 at 7:00 GMT

Morning Markets: Asian stocks enjoy French fillip

Consulting editor / TradingFloor



  • France: Monthly business survey, goods-producing industries (published)
  • US: S&P CoreLogic Case-Shiller Indices (1300 GMT)
  • US: New home sales (1400 GMT)
  • US: Consumer confidence (1400 GMT)
  • US: API weekly statistical bulletin, including crude oil and gasoline stocks (2030 GMT)

US stocks rose overnight, with the Nasdaq notching a new record-high close, lifted by the reassuring outcome of Sunday's first round of the French presidential election, and the good vibes from France kept Asian equity markets advancing on Tuesday.

Japan's Nikkei 225 ended up 1.1%, Hong Kong's Hang Seng gained 1.2%, but the Shanghai Composite added just 0.2%.

The euro eased during the Asian trading session, backing off a five-month high that it had hit on Monday with help from the first-round election victory for the French centrist candidate Emmanuel Macron, who is also widely tipped to win the second round on May 7 against the far-right's Marine Le Pen. The French election outcome had ignited a broad relief rally on Monday, when the CAC 40 index jumped more than 4%.

The Canadian dollar was dented and USDCAD rose on news that the Trump administration would impose a new tariff on Canadian imports of lumber.

Shares in US aluminium producer Alcoa — an important cyclical bellwether — surged 5% on Monday after the company reported forecast-beating earnings and raised its demand growth forecast, though first-quarter revenue missed analysts' average estimate.

Markets are looking ahead to the European Central Bank's and Bank of Japan's policy meetings on Thursday.

Market signals

Asian session

  • Global relief rally that followed round one of the French election lifted Asian markets
  • French result drove the Nasdaq up by a record 1.24%, and the Dow Jones up 1.05%
  • Gold retreated as investors flocked to equities; spot was worth $1,273.76/oz at 0508 GMT
  • Japan's Services Producer Price Index rose 0.8% in the year to March
  • Nikkei 225 ended up 1.1%, thanks to Wall Street's gains and the lower yen
  • Shanghai Composite was up 0.34% to 3,140.09 at 0529 GMT
  • Korea's Kospi Composite was up 0.72% to 2,189.33 at 0510 GMT
  • South Korean consumer confidence hit six-month high in April
  • Full convertibility of the yuan is a priority for China, says PBoC deputy governor
  • HSBC will advise Saudi Aramco on its IPO – potentially the largest float in the world
  • Oil rose after falling on doubts over whether Opec will continue its output cuts
  • Markets were closed in Australia and New Zealand for the Anzac Day public holiday
  • Marine Le Pen stepped down as head of the National Front to boost her electoral appeal

Forex ahead

  • USDCAD higher on news of US tariff on Canadian timber imports
  • US dollar gained ground against yen; it was worth ¥110.0590 at 0531 GMT
  • China's yuan firmed against USD; the dollar was worth 6.8838 yuan at 0531 GMT
  • Australian dollar retreated; it was worth 0.7555 at 0530 GMT

From the Floor

Flows. “The big theme over the rest of this quarter is that capital will come flowing back into the Europe,” says Garnry. “We had a major breakout yesterday in the CAC.”

Shaky shutdown. “The [US] government shutdown risk seems to be fading somewhat,” says Hardy

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

New-home sales in the US are in the spotlight today with March numbers expected to show a dip from last month, says James Picerno.

Back to America

With the first round of voting over in the French presidential election, Asia will increasingly turn to the US for guidance as the week progresses, says Saxo's Singapore team

Volatility plunges
The European volatility benchmark VSTOXX plunged 30% on Monday as the French election outcome seemed to quash fears of a "Frexit", writes Georgio Stoev.

Russian shift
Russia's decision to take de-facto full economic and political control over the separatist Dombass regions followed the gradual demise of the Minsk accord, writes Nadia Kazakova.

Tuileries and the Louvre

 "La vie en rose"? The outcome of Sunday's first-round presidential ballot in France sparked a wave of good feeling across markets at the beginning of the week. Photo: Shutterstock

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