Asian equities were steady on Tuesday and the euro retained gains as markets’ euphoria over a centrist victory in the first round of the French presidential election subsided, though near-term investor sentiment remains positive. The risk rally has kept safe-haven assets, including the yen and gold came, under pressure, while the Canadian dollar fell after the U.S. announced new duties averaging 20 percent on Canadian softwood lumber imports. The Canadian currency tumbled to a four-month low as the U.S. dollar strengthened 0.35 percent to C$1.3543.
MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed early on Tuesday. Japan’s Nikkei added 0.3 percent. South Korea’s KOSPI advanced 0.2 percent. Australia is closed for a holiday.
Polls show Emmanuel Macron defeating anti-euro nationalist Marine Le Pen by as much as 30 percentage points in the second round of the French presidential election in two weeks. “This alleviates fears that we were going to have to navigate a French exit (from) the European Union,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management in Menomonee Falls, Wisconsin.
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Overnight, the MSCI World index surged 1.6 percent to an all-time high. The pan-European STOXX 50 index soared 4 percent, its best day in nearly two years and France’s CAC40 jumped 4.1 percent, its biggest one-day gain in almost five years. On Wall Street, the Nasdaq climbed 1.2 percent to a record high, while the Dow and the S&P both gained 1.1 percent.
The euro was little changed at $1.087 early on Tuesday, retaining Monday’s 1.3 percent gain, its strongest one-day performance in 10 1/2 months, that lifted it to a 5 1/2-month high.
The euro’s earlier gains had weighed on the dollar index, which touched a four-week low overnight. The index, which tracks the greenback against a basket of trade-weighted peers, was flat at 99.092, failing to make up Monday’s 0.9 percent loss.
The dollar was steady at 109.81 yen early on Tuesday, after Monday’s 0.6 percent jump as investors sold off the safe-haven yen.
A strong earnings season in the U.S. has also lifted investors’ spirits, with 77 percent of the 100 companies that have reported first-quarter results so far beating profit expectations. This week is set to be the busiest in at least a decade, with over 190 S&P 500 companies reporting first-quarter results, including heavy weights Alphabet and Microsoft .
This week in Asia, investors await a raft of economic indicators, including first-quarter inflation data for Australia and Japan, the Bank of Japan’s interest rate decision, Japan’s March unemployment rate and first-quarter gross domestic product for Taiwan and South Korea.
In commodities markets, oil prices crept higher after six straight sessions of losses, although gains were capped by fears that the Organization of Petroleum Exporting Countries may not extend output cuts beyond June 30, and as Russia indicated it can lift output if the deal on curbs lapses.
U.S. crude added 0.2 percent to $49.35 a barrel, but hovered close to the lowest level in almost four weeks hit on Monday. Gold inched higher after slumping to a two-week low overnight. It was trading 0.1 percent higher at $1,277.01 an ounce.