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MICHAEL MACKENZIE: Here's what we're watching with a global trading day up and running in London. UK and European equities are on the defensive after a mixed performance in Asia. A big hit to profits at HSBC is hurting the banking sector and clipping the FTSE 100. Now, that may all change once Wall Street returns from its long weekend.
Equity futures currently indicate that record territory beckons for the major US share markets once more. The firmer dollar is weighing on gold, the euro, and the yen, while bond yields are edging higher, led by French debt. Bond investors are definitely getting rather edgy over France's upcoming presidential contest.
Currently, the risk premium between ten-year French and German bunds has raised from yesterday's peak of 82 basis points, but should we see new polls suggesting that the National Front party continues gaining traction, that will keep pushing French bond yields higher. So what are investors buying? Well, the euro currency redenomination playbook is back. German two-year yields have plunged a new record low of minus 0.7%
