Forex Today: EUR cheers French election R1 outcome, IFO eyed

Volatility was back into markets in early Asia, after the outcome of the first round of the French election triggered a risk-on rally across the asset classes. As widely expected, Macron and Le Pen took the lead for the run-offs, which backed the credibility of the opinion polls. Further, with the polls showing Macron gaining over 60% support versus Le Pen’s 25% in the round 2, also fuelled the risk-on moods.

EUR/USD rallied hard alongside the treasury yields and Asian stocks, while the USD was dumped across the board. Meanwhile, the Antipodeans and USD/JPY benefited from the persisting risk-on trades. The ultimate safe-havens gold and treasuries were sold-off into demand for risk assets.

Looking ahead, markets will continue to digest the French election R1 outcome ahead of the German IFO business climate data and Buba monthly report due to be published in the EUR session, while the UK docket offers the CBI industrial orders data. In the NA session today, the Canadian wholesale sales data will fill in an otherwise data-empty calendar. Meanwhile, FOMC member Kashkari’s speech will also grab some attention in the day ahead.

Main topics in Asia

French election R1 update: Macron 23.87% vs Le Pen 21.43%

After 97% of the vote counted, Macron has extended his leads marginally to 23.87%, while Le Pen has received 21.43% of the votes.

EUR/USD's post-French election rally still intact

EUR/USD's rally found territory on the 1.09 handle but has dropped back to 1.0880, albeit still up 1.44% in thin trade in early Asia. 

Treasury yields jump, point to risk-on after first round of French election

Treasury yields jumped in Asia after the first round of the French election ended with Macron and Le Pen in the lead.

Asian stocks ex-China rally on French election relief

Stock markets across Asia except China rallied this Monday morning as investors breathed a sigh of relief after Macron and Le Pen won the first round of the French elections as the polls had suggested.

China Pres Xi and US Pres Trump discussed N. Korea in a phone call - Xinhua

US VP Pence to cut short APAC trip, return to Washington to focus on domestic policy

Japan PM Abe: ‘Had thorough exchange of views over North Korea with Trump’

Key Focus ahead

EUR/USD reverses half the post-French election rally, what next?

The Euro jumped to the highest levels since early November 2016 against its American peer, after the outcome of the first round of the French presidential election showed Macron and Le Pen heading into the second round, as widely expected. 

Is the 7 May second-round polling likely to change in the next two weeks? - Nomura

Analysts at Nomura explained that the second-round polling so far has been largely hypothetical as undecided voters or those who are disappointed not to see their candidate making it into the second round will now be making their choices in full knowledge of the options. 

Trump's tax plans to be announced this week - ANZ

Analysts at ANZ explained that news that President Trump will announce details of his tax plan this week gave markets a late boost on Friday. 

EU to tighten guidelines on Brexit Bill - Livesquawk

Livesquawk reports headlines from the German daily, Handelsblatt (HB), citing that the EU plans to tighten guidelines on the Brexit Bill.

Alert on potential North Korean missile or nuclear device test tomorrow

Talks going around the rumor mill that North Korea may test an intercontinental ballistic missile or even nuclear device tomorrow around marking the 85th anniversary of the founding of its military.