European bourses upbeat following Wall Street gains

• European bourses track positive Wall Street lead
• Euro gains and Bund yields edge up as French election looms
• Dollar index steady as traders await Fed and jobs data
• Brent crude slips and gold edges higher

Hot topic

Apple will report its results after Tuesday’s closing bell in New York and investors will be keen to see if the iPhone maker can help propel Wall Street to fresh highs. Futures indicate the S&P 500 will gain 1 point to 2,289.3 when trading gets under way later in the session, leaving the US equity benchmark just 7 points shy of its record close touched at the start of March.

Investor sentiment is being buoyed by a generally well-received first-quarter corporate earnings season and hopes that structural growth for many big technology companies — such as Facebook, Google, Amazon — can continue to power aggregate profits. The tech-heavy Nasdaq Composite closed on Monday in virgin territory having gained 13.2 per cent already in 2017.

Equities

Many European bourses are returning from a long weekend in an upbeat mood following Wall Street’s latest gains. The Stoxx 600 is up 0.2 per cent as banks, insurers and the energy sector, helped by BP’s results, find favour.

Asia was more mixed. Japan’s Topix rose 0.7 per cent, as exporters were helped by a weakening yen, while Australia’s S&P/ASX 200 was down 0.1 per cent owing to a bad day for the banks after ANZ Banking Group reported a half-year profit that missed analysts’ expectations.

South Korea’s Kospi shrugged off tensions with the North and was eyeing a record high with a gain of as much as 1.1 per cent to 2,229.7 in morning trade, before paring its advance to 0.7 per cent. After returning from a long weekend, Hong Kong’s Hang Seng was flat and China’s Shanghai Composite lost 0.4 per cent amid lingering concerns about a regulatory clampdown on speculative trading.

Forex

The dollar index, a measure of the US currency against a basket of global peers, is barely changed at 99.09, continuing to wallow in the wake of Friday’s disappointing US gross domestic product data for the March quarter and Monday’s news of weak manufacturing activity in April.

The euro is up 0.1 per cent to $1.0912 and benchmark German Bund yields are less than one basis point firmer at 0.33 per cent, ahead of manufacturing activity surveys due for release on Tuesday. Sterling is down 0.1 per cent to $1.2873 and benchmark gilt yields are steady at 1.09 per cent as traders absorb the latest Brexit developments.

The Japanese yen is down 0.2 per cent to ¥112.09 per dollar, near to its weakest level in six weeks as easing risk aversion reduces demands for perceived havens. The Australian dollar is up 0.2 per cent against its US counterpart after the central bank left monetary policy unchanged and delivered fairly upbeat commentary on economic conditions.

Fixed income

US Treasuries are trading cautiously ahead of the Federal Reserve’s monetary policy decision on Wednesday, and the monthly non-farm payrolls report on Friday. The US 10-year yield is a fraction of a basis point softer at 2.32 per cent, while the more policy-sensitive 2-year yield is also barely changed at 1.28 per cent.

Commodities

Oil prices are continuing to slide as investors fret about rising supply. Brent crude, the international benchmark, is down 0.3 per cent to $51.39 a barrel, while West Texas Intermediate, the main US contract, is slipping 0.4 per cent to $48.66.

Gold is up less than $1 to $1,258 an ounce.