* Macron wins first round in French vote, ahead in polls
* Bluechip European shares jump 3 percent, euro up 1 percent
* Safe-haven, yen, Treasuries and gold fall
* Oil prices inch up after steep losses last week
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Marc Jones
LONDON, April 24 Euro zone stocks headed for
their best day in almost two years on Monday and the euro
briefly vaulted to five-month peaks, after the market's favoured
candidate won the first round of the French election, reducing
the risk of another Brexit-like shock.
The victory for pro-EU centrist Emmanuel Macron, who is now
expected to beat right-wing rival Marine Le Pen in a deciding
vote next month, sent the bluechip STOXX 50 index
up 3.7 percent, France's CAC40 over 4
percent and bank stocks up more than 6 percent.
Traders top-sliced some of the euro's overnight gains, but
it was still up more than 1 percent on the dollar,
more than 2 percent against the yen and 1.3 percent on
the pound ahead of the U.S. session.
"It (the first round result) has come out in line with the
market's expectations so you have something of a risk rally as
there was a bit of a risk-premium built into all markets," said
James Binny, head of currency at State Street Global Advisors.
There was also an unwinding of safe-haven trades.
Shorter-term German bonds saw their biggest
sell-off since the end of 2015 as investors piled back into
French as well as Italian, Spanish, Portuguese and
The Japanese yen's fall was widespread, the
market's so-called fear-guage, the VIX volatility index,
plunged the most since November and gold saw its biggest
tumble in more than a month.
Macron's pledges of gradual deregulation in France and cuts
in state expenditure and the civil service are the kind of talk
global financial markets like to hear.
Le Pen wants to print money to finance expanded welfare
payments and tax cuts, ditch the euro currency and possibly pull
out of the EU, all of which raise huge uncertainties.
"Good that @EmmanuelMacron succeeded with his policy for a
strong EU and social market economy," German Chancellor Angela
Merkel's spokesman tweeted, wishing him all the best for the
next two weeks."
Futures markets pointed to a 1 percent rise for Wall Street
which is in now in the grip of earnings season.
Asia also saw a risk rally. Japan's Nikkei jumped
1.5 percent as the yen retreated, while MSCI's broadest index of
Asia-Pacific shares outside Japan edged up 0.3
Shanghai shares fell 1.7 percent after state media
signalled Beijing would tolerate more market volatility as
regulators clamp down on riskier financing.
But Macron's success set the tone.
The euro jumped in relief, and was last up 1.3 percent at
$1.0873, having been as far as $1.0940, the highest since
early November just after Donald Trump's U.S. election win.
The safe-haven yen slipped across the board with the euro
surging as much 2.4 percent to 119.77 yen while the
U.S. dollar gained 1 percent to 110.10 yen.
"I am a bit surprised by the strength of rally because this
result itself is not that surprising," said Barclays' head of
European research Philippe Gudin de Vallerin.
"But we have a relief for Europe in a way that the worst
case scenario has been avoided and that is why we have seen the
rally in all markets," he said, adding there was also hope
Macron would strengthen the key Franco-German relationship.
SCEPTICAL ON TAX
Wall Street on Friday had only a modest lift from news
President Donald Trump would announce the broad outline of his
proposed tax package on Wednesday.
"Markets are sceptical that the real details will be
forthcoming," said analysts at ANZ in a note.
"There is also plenty of conjecture about whether any tax
cuts will be able to be revenue neutral, and that could affect
their ease of passage through Congress."
The Dow ended Friday down a minor 0.15 percent, while
the S&P 500 lost 0.30 percent and the Nasdaq fell
Investors were also keeping a wary eye on tensions in the
North Korea said on Sunday it was ready to sink a U.S.
aircraft carrier to demonstrate its military might, in the
latest sign of rising tension as Trump called the leaders of
China and Japan to discuss the situation.
South Korea responded by asking Washington about holding
joint drills with the USS Carl Vinson aircraft carrier strike
group as it approaches waters off the Korean peninsula.
Oil prices recouped just a little of last week's hefty
losses, still weighed by signs U.S. production and inventory
growth were offsetting OPEC's attempts to reduce the global
Brent futures were up 16 cents at $52.12 a barrel,
while U.S. crude futures added 17 cents to $49.79.
(Additional reporting by Wayne Cole in Sydney; Editing by Toby