* Euro climbs to six-week highs vs dollar
* French presidential candidate Macron boosted by TV debate
* European shares open higher, Asia shares hit 21-month high
* Oil prices rise on OPEC talk
By Dhara Ranasinghe
LONDON, March 21 The euro climbed to six-week
highs and French bonds and stocks rallied on Tuesday after
centrist Emmanuel Macron's performance in a television debate
raised expectations he would win France's presidential election
over the far-right's Marine Le Pen.
The dollar was also held back by doubts about how fast U.S.
interest rate would rise. Oil prices rallied almost 1 percent on
talk that OPEC could extend supply cuts.
European stock markets opened higher ,
after a rally in Asia, where MSCI's broadest index of
Asia-Pacific shares outside Japan hit 21-month
highs, supported by signs of strong global economic growth.
U.S. stock futures pointed to a positive
start for Wall Street, which had suffered on Monday as investors
worried that President Donald Trump's plan to cut taxes and
boost the economy would take longer than expected to realise.
France's turbulent presidential campaign remained in focus
for global investors, who have been concerned about the
potential for a populist backlash following last year's surprise
votes for Brexit in Britain and for Trump in the United States.
A snap opinion poll that followed Monday's televised debate
showed Macron, a former economy minister who has never run for
public office before, was seen as the most convincing among the
top five contenders in a marathon debate.
The debate, and two others that will follow before the April
23 first round, are considered crucial in an election in which
nearly 40 percent of voters say they are not sure who to back.
"From the point of view of international investors, this is
a positive as it keeps France's position in the euro zone
secure, or at least not weaker," said DZ Bank analyst Rene
Macron's presidential bid gathered pace on Tuesday after a
junior minister said she would back his campaign, becoming the
first member of the government to do so.
The prospect of anti-euro, far-right candidate delivering a
surprise election win has rattled French bond markets this year.
But on Tuesday, the premium investors demand for holding
French 10-year government bonds over German ones
narrowed to around 63 basis points from Monday's
68 bps, a near-two-week high.
Safe-haven German Bunds sold off as French election jitters
ebbed. French banks such as BNP Paribas and Societe
Generale -- bellwethers of sentiment in France --
were among the top gainers on France's benchmark stock index
The euro rallied to $1.0804, its highest in about six
weeks and was 0.3 percent firmer against sterling.
"The euro has been helped by Macron's performance,
definitely," said Stephen Gallo, head of European FX strategy at
Bank of Montreal in London.
The British currency was boosted by stronger-than-expected
inflation numbers that took the rate of prices past the Bank of
England's 2 percent target.
The dollar index fell below 100 for the first time
since early February and was down almost half a percent on the
The currency was on the defensive after Chicago Federal
Reserve President Charles Evans reinforced the perception that
the U.S. central bank will not accelerate the pace of its
interest rate hikes.
He said on Monday that two more interest rate hikes this
year were likely, disappointing investors who had anticipated
rates would be increased more quickly.
The 10-year U.S. Treasury yield briefly fell to
two-week lows following the comments to 2.461 percent. It last
stood at 2.48 percent.
Oil prices rallied on expectations that an OPEC-led
production cut to prop up the market could be extended.
Prices for front-month Brent crude futures, the
international benchmark for oil, gained 1 percent to $52.13 per
OPEC members increasingly favour extending the output curb
beyond June to balance the market, sources within the group
said, although they added this would require non-OPEC members
such as Russia to also step up their efforts.
Elsewhere, Deutsche Bank was in focus as the
subscription period for a capital raising began on Tuesday.
Shares in Germany's biggest bank rose 2.3 percent, having
tumbled over 10 percent in pre-market trade.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Abhinav Ramnarayan in London and
Hideyuki Sano in Tokyo)