World markets hit new highs on Macron relief rally and Trump tax plans - as it happened
Relief over the French elections and Trump's tax cuts plan are pushing shares higher across the globe
- Nasdaq hits 6000 for first time
- World markets hit record highs
- Markets expect Macron to become next French president
- European markets add to Monday's gains
- Trump's tax cut plans also please traders
- UK government deficit falls to 52bn
- Joris Luyendijk: The doom-mongers got it wrong
5.57pm BST
Global markets are still on the front foot, thanks to optimism over Emmanuel Macron winning the second round of the French presidential election, some positive US corporate news and anticipation over President Trump's forthcoming tax proposals. But with some concerns that there is a chance far right candidate Marine Le Pen could still defeat Macron, the gains in Europe were subdued. But there were no such worries in the US, with the Nasdaq Composite breaking through 6000 for the first time and the Dow Jones Industrial Average also moving sharply higher.
The final scores in Europe showed:
3.29pm BST
Commenting on the day's market moves, Spreadex financial analyst Connor Campbell said:
The Macron-move was joined by a Trump and earnings-inspired surge from the Dow Jones this afternoon.
There were two main reasons for the Dow's 200 point jump after the bell... First, impressive updates from McDonald's, which saw some super-sized, all day breakfast-charged like-for-like sales, and Caterpillar, which posted Q1 EPS of $1.28 against the 62 cents expected, added a chunk of growth, the companies climbing 4.1% and 6.4% respectively. Secondly, and more importantly, investors are getting all hot under the collar for the promised reveal of Donald Trump's tax plan tomorrow, an announcement abuzz with the President's trademark haphazardness.
3.14pm BST
Meanwhile the Dow Jones Industrial Average has reached 21,000 for the first time since the middle of March, on a mixture of positivity over the French election, a number of good corporate results and anticipation for Donald Trump's tax reforms.
3.10pm BST
In other US data, single family home sales jumped to an eight month high in March.
Sales rose 5.8% to a seasonally adjusted annual rate of 621,000 units, but February's figure was revised down from 592,000 to 587,000.
3.08pm BST
US consumers were less confident than expected in April, partly due to concerns about the jobs market.
The Conference Board consumer confidence index came in at 120.3 in April, below the 122.5 that analysts had been expecting. The March figure was revised down from 125.6 to 124.9. Lynn Franco, director of economic indicators at the Conference Board, said:
Consumer confidence declined in April after increasing sharply over the past two months, but still remains at strong levels. Consumers assessed current business conditions and, to a lesser extent, the labor market less favorably than in March. Looking ahead, consumers were somewhat less optimistic about the short-term outlook for business conditions, employment and income prospects. Despite April's decline, consumers remain confident that the economy will continue to expand in the months ahead.
Consumers' assessment of the labor market was moderately less favorable. Those stating jobs are "plentiful" declined from 31.8 percent to 30.8 percent, while those claiming jobs are "hard to get" was virtually unchanged at 19.1 percent.
2.51pm BST
The Nasdaq Composite first hit 5000 back in 2000 at the height of the dotcom boom. But the subsequent bust meant it has taken 17 years for the index to add the next 1000 points to get to 6000.
2.41pm BST
Party like it's 1999! Nasdaq Composite tops 6k for the first time ever. pic.twitter.com/hV4LRrcOmO
2.39pm BST
US markets have again joined the global optimism, with the technology led Nasdaq Composite hitting 6000 for the first time.
The chances of Emmanuel Macron winning the French presidential election at the expense of far right rival Marine Le Pen has pushed share prices higher, while investors are also anticipating US president Donald Trump's tax announcement. Trump is said to be about to announce more details of his plans on Wednesday, including a possible cut to corporation tax to 15%. Meanwhile a host of positive results, notably from McDonalds and Caterpillar, have also provided support.
2.19pm BST
Ahead of the Wall Street open, new figures show that US house prices rose more quickly than expected in February.
The S&P CoreLogic Case-Schiller index of 20 metropolitan areas rose 5.9% in February, compared to 5.7% in January and expectations of 5.7% again. This was the biggest year on year increase since July 2014.
2.03pm BST
1.52pm BST
The US stock market is expected to rise when trading begins in under 40 minutes.
That's thanks to fast food chain McDonald's, and construction and mining equipment maker Caterpillar. Both companies have beaten analyst forecasts for sales and profits today.
Dow futures +150 after strong earnings from McDonalds and Catepillar
1.14pm BST
Bad news for the UK: 300 jobs are reportedly being cut at Nestle.
The Swiss chocolate maker is also moving production of its Blue Riband bar to Poland, unions say.
Confectionery giant Nestle is planning 300 job losses and move production of the Blue Riband to Poland - @GMB_union @unitetheunion
#Breaking Nestle planning to cut nearly 300 jobs, mainly in York and Newcastle, and move Blue Riband biscuit production to Poland - unions
12.41pm BST
Over in Berlin, Donald Trump's daughter Ivanka is rubbing shoulders with some of the world's most powerful women, at the W20 women's empowerment summit.
The event, backed by the G20 group of advanced economies, is aiming to increase women's economic empowerment. Its motto is:
"Inspiring women: scaling up women's entrepreneurship"
Moderator notes murmur in the room when Ivanka mentions her dad's commitment to women, says "I must ask about that." Ivanka: "I have ..."
Merkel says "what I am especially interested in, and why Ivanka Trump is here": Womens access to financing. #w20
Ivanka gets booed and hissed by audience when she says her father is a"tremendous champion of supporting families."
First Q to Ivanka at #W20: explain your role in father's administration? It's "quite new to me," she says. "I'm listening, I'm learning."
Some in audience now hissing Ivanka as moderator presses her about @POTUS attitude toward women. #W20
12.16pm BST
This wave of investor optimism is jolly good news for the world's richest men and women.
Bloomberg has calculated that Europe's billionaires added $27.5bn to their collective fortunes (on paper, anyway), thanks to the jump in share prices on Monday.
Europe's richest gain $27.5 billion on French vote rally https://t.co/6JTxboUden via @justin_villamil @coldspot pic.twitter.com/JO33NpQl4h
11.56am BST
The latest Guardian Brexit Dashboard is out, showing the state of Britain's economy since last June's EU referendum.
And the warning light next to 'living standards' is flashing alarmingly, as rising inflation hits household incomes.
The pound's sharp fall since the Brexit vote and a mood of uncertainty among employers has hit household budgets creating a tough economic backdrop for Theresa May's snap election, a Guardian analysis shows.
The prime minister will be hoping the resilience seen in the UK economy in the wake of last summer's referendum will hold over the coming months now that she has called an election for this June. But the Guardian's monthly tracker of economic news shows living standards are already falling as rising prices outpace meagre pay growth.
Related: Brexit economy: living standards are falling as the snap election looms
11.32am BST
European stock markets are holding onto this morning's gains, keeping the MSCI World Index at record levels.
In London, the FTSE 100 is 20 points higher, while France's CAC has also added to Monday's 4% surge.
The latest opinion polls have Macron crushing Le Pen with more than 60% of the vote; however, the far right has continually beaten the odds in the last year and a half, so there could still be some more volatility in store before May's second election.
11.15am BST
The latest opinion polls suggests that Emmanuel Macron would win comfortably on May 7th.
*MACRON SEEN BEATING LE PEN 61%-39% IN OPINIONWAY DAILY POLL
If playing with fire in politics means anything, this was it. Mi(C)lenchon spoke dismissively of both, as if unable or unwilling to see the difference. He announced that his radical left movement, France Unbowed, would organise an online "consultation" designed to determine its position ahead of the run-off. It was as bewildering as it was disgraceful. And it was a deliberate attempt to deny or minimise what is now at play.
Yet the choice France now faces could not be more clear-cut: an open, liberal message versus a closed, illiberal one. A platform of inclusiveness versus one of bigotry and nationalist hatred. A promise to strengthen the European project through reform versus a pledge to close borders, introduce protectionism and pull out of Euro-Atlantic structures. It's also a choice between a candidate who resolutely criticises President Putin and his worldview, and one who consistently panders to the Russian autocrat and has been financially dependent on his networks.
#France Don't assume Le Pen beaten. For one thing, radical left playing dangerous game. Collusion of the extremes? https://t.co/kjB8Mo7pF8
10.51am BST
In the bond markets, the gap between German and French borrowing costs has narrowed this morning, extending Monday's moves.
That shows investors are less anxious about France quitting the eurozone - a possibility if Marine Le Pen becomes French president.
Spread between German and French 10yr bonds still tightening - just 41bps now. pic.twitter.com/KxbK1QN3L5
10.43am BST
Financial market volatility has slumped since the French election results were released on Sunday night.
That shows that investors are pleased that Emmanuel Macron will fight Marine Le Pen for the presidency.
The most interesting result of the French election vote was the collapse of volatility indicators globally.
The VIX index declined -19% from 15.30 while one-month implied volatility in the euro-US dollar exchange rate fell to 8.20 from 13.45.
10.32am BST
Let's get back to the stock market rally! And Donald Trump can take some credit for the rise in share prices this week.
The US stocks were resuscitated after the White House announced that the US corporate taxes will be cut by 15% as part of Donald Trump's 'major' fiscal plans.
According to the latest news, the personal income taxes will also be reduced. More details are due at the Wednesday's announcement. Donald Trump will prioritize the tax cuts over the budget deficit.
10.24am BST
Matt Whittaker of Resolution Foundation has tweeted a handy chart, showing how the UK deficit has fallen over the last few years:
Public sector net borrowing was 52bn in 2016-17, in line with OBR forecast & 28% down on 2015-16. But it's projected to rise next year pic.twitter.com/EWpWRHQj3M
10.16am BST
There's no room for complacency about the state of Britain's public finances, just because the deficit fell to 52bn last year.
So argues John Hawksworth, PwC chief economist, who fears that borrowing could be driven up again.
A number of one-off factors relating to the timing of tax receipts and spending flattered the deficit figures for 2016/17 but are likely to be reversed in 2017/18.
"Higher inflation will also act as a drag on growth over the next year while boosting some benefit payments that are linked to prices. So the improvement in the deficit could well be reversed in the coming financial year as the OBR predicted.
9.39am BST
Breaking: Britain's annual public deficit has fallen to its lowest level in almost a decade.
The UK borrowed 52bn in the 2016-17 financial year, new figures show. That's slightly above the 51.7bn predicted in last month's budget, but around 20bn or 28% lower than the previous year.
9.30am BST
Markets do have a strong history of getting carried away by political events, especially if their favourite candidate is doing well.
Equity markets are putting a lot of faith into Macron, he first has to win the second round of the French Presidential election and get the keys to the Elysee Palace, but then his newly formed party has to do well in the National Assembly elections in June.
French banks have been the immediate beneficiaries to Macron's strong showing in the first round of the vote. Societe General, BNP Paribas and Credit Agricole rose 9.5%, 7.5% and 10.8% respectively on Monday. This is to be expected, as they are most correlated to the economy and are likely to salute a pro-business Presidential candidate. However, they are also most at risk if Macron's En Marche! Party do not get enough seats in the National Assembly elections in two months' time, which would make it hard for Macron to get his pro-growth agenda into action.
9.24am BST
The French presidential rate took another twist last night, when Marine Le Pen announced she was stepping aside as leader of the National Front.
That may help her win support from voters who aren't impressed by Macron, but can't stomach placing a cross next to a party with such a toxic past.
Le Pen step-aside from NF leadership is clever politics. Going after Fillon's supporters. But good 1st round turnout suggests she'll lose
9.09am BST
Optimism over the French election is pushing the euro up this morning. It's gained 0.2% to $1.089, close to the five-month high struck on Sunday night.
9.05am BST
Good news for the next French president -- the country's business leaders are at their most optimistic since 2011.
French business morale in April jumps to highest in almost 6 years. pic.twitter.com/I7B4At4STU
8.57am BST
Bullish investors are in "firm control" of the markets right now, says Chris Weston of IG.
Weston writes:
Despite concerns of elevated valuation, macroeconomic and geopolitical risks, the fact the MSCI World index is at an all-time high is remarkable, especially when we think that we haven't seen a 2% pullback for 120 trading sessions.
8.48am BST
India's main stock index, the NSE Nifty, has swept to a new all-time high today.
Tirthankar Patnaik, India strategist at Mizuho Bank, explains:
"Global markets have been very positive on news from the French election,"
8.41am BST
Markets are in a "party mood" this morning thanks to last Sunday's French elections, says FXTM chief market strategist Hussein Sayed.
It now appears that investors are confident that Macron will be France's next president and will win the battle on 7 May easily. Investors who lost confidence in pollsters after they failed to predict the outcomes of the U.S. elections and Brexit vote are all of a sudden viewing them as credible sources of information again...
The importance of this one single event was reflected in asset classes across the globe, but whether this rally will have legs depends on how big Macron wins. Macron would need to win by a margin of more than 60% in the second round to unite a divided country and ensure that the spread of populism ends in France.
8.38am BST
Frankfurt traders have pushed the German DAZ to new record highs:
#DAX hit all-time high for the second consecutive session as #Macron leads the #Frenchelections optinion polls.
8.28am BST
European stock markets are inching higher this morning, adding to yesterday's strong rally.
The French CAC, German DAX and UK FTSE 100 have all gained a little ground in early trading, helping to send global markets to record levels.
Peeperz. Europe opens a smidge higher after European Stoxx 50's best day in 2 yrs y'day (up 4%)..CAC up a mouse toe this morn (up 4% y'day)
8.24am BST
Global stock markets have hit their highest ever levels this morning, as relief over the French presidential election continues to sweep through trading floors.
Related: Stock markets surge after French election result
"Following the first-round election we are now in a crucial fortnight for France in which the impact of terror events, further WikiLeaks' disclosures or potential scandals are multiplied by the fact that if Macron the centrist doesn't win, Le Pen the extremist will.
Nevertheless, the chances of an Emmanuel Macron victory in the run-off election are very high indeed.
Markets are surmising that Emmanuel Macron is a dead certainty to be French President in two weeks' time, and while this is probably the most benign outcome at a time of rising populism it completely overlooks the challenges facing the new French President when he or she takes office on May 8th.
For a start while Mr Macron is an outsider from the established political order, he will still be viewed by the majority of the 40% of French people who voted for anti-Euro candidates, as very much part of the same elite who he has helped to push to one side in this particular vote, which means he will be presiding over a country very much ill at ease with itself.
7.59am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
We're about to discover how much Britain was forced to borrow to meet its financial needs last year, and whether it hit its targets.
Macro data this morning includes March UK Public Finances with net borrowing set to continue to rise following January's seasonal drop on corporation tax receipts and accounting revisions.
Related: Marine Le Pen attacks Macron as France's mainstream rallies behind him
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