● Bourses mixed as Wall Street holds at record highs
● Vix index points to investor calm with 23-year low
● Government bond yields move up as political tensions fade
● Euro rally loses momentum and dollar index edges up
● Oil prices struggle to rally as gold steadies

US index futures show the S&P 500 will open at 2,398.4, dipping just one point from its record close when trading gets under way later in the day in New York.

A well-received corporate earnings season and easing political tensions — after Emmanuel Macron’s victory in the French presidential election damped fears of a eurozone break-up — have helped power the bull run.

And derivatives suggest investors are very relaxed about the stock market’s prospects.

The CBOE Vix index, an option-based measure of expected equity volatility that is known as Wall Street’s fear gauge, closed on Monday at 9.77, its lowest since December 1993.

Says Kit Juckes at Société Générale:

The victory of Macron… has lifted a cloud from the Eurozone’s horizon and more widely, has triggered a sharp fall in volatility. FX vol has fallen very sharply, unsurprisingly, and the Vix has fallen more quietly, to its lowest level since 1993.

Collapsing vol is bad for the yen (and possibly worse for the Swiss franc, in this context) and good for yieldier currencies generally. It’s an invitation to add risk and yield to a portfolio if volatility-adjusted returns are expected to be higher as a result of the low vol.

The Australian dollar is a notably poor performer among the major currencies, falling 0.7 per cent to $0.7339, a four-month low, after data showed retail sales in the country fell 0.1 per cent in March from the previous month, weaker than expectations for 0.3 per cent growth.

Sterling is struggling to rally in the wake of news that UK retailers had a strong Easter. The pound, which on Monday hit a seven-month intraday high of $1.2983 on hopes a victory for the ruling Conservative party in next month’s election would help deliver a softer Brexit, is down 3 pips to $1.2935.

The euro is also having difficulty recording any follow-through from Mr Macron’s election victory, dipping 0.2 per cent to $1.0906.

Oil prices are striving to extend their recovery from last week’s sharp drop, following assurances on Monday from Saudi Arabia that Opec is determined to end the supply glut.

Brent crude, the international benchmark, is up 0.1 per cent to $49.38 a barrel while West Texas Intermediate is gaining 0.3 per cent to $46.59.

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