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Equity Markets

The Nasdaq hit a record high at the open on Monday, with other indexes also surging -- with the Dow chalking up a triple-digit gain, as investors breathed a sigh of relief after Centrist candidate and market favourite Emmanuel Macron won the first round of the French election. Along with the French election results, traders were also weighing suggestions from U.S. President Donald Trump that a broad package of tax reform could be in the offing this week.

The Dow Jones Industrial Average was up 212.56 points, or 1.03 per cent, at 20,760.32, the S&P 500 was up 25.41 points, or 1.08 per cent, at 2,374.1 and the Nasdaq Composite was up 69.55 points, or 1.18 per cent, at 5,980.08.

Canada's main stock index also opened higher, helped by gains for its heavyweight financials sector, while gold miners and other materials stocks weighed.

The Toronto Stock Exchange's S&P/TSX composite index was up 79.34 points, or 0.51 per cent, at 15,693.82 shortly after the open.

The relief rally started in across Europe earlier Monday as the French presidential election played out along market expectations and skirted a divide that could have seen candidates at the far ends of the political spectrum face off next month. European shares jumped in early trading - France's blue chip CAC 40 was trading up more than 4 per cent with French banks surging -- and the euro briefly touched a five-month high on news centrist Emmanuel Macron led the first round of voting. Elsewhere in Europe, London's FTSE 100 gained 1.8 per cent and Germany's DAX jumped 3 per cent.

In Asia, Tokyo's Nikkei climbed 1.4 per cent, and Hong Kong's Hang Seng a lesser 0.4 per cent, though the Shanghai composite lost 1.4 per cent.

"While markets are celebrating what looks like a significant blow to the populist movement it would be a mistake for politicians to think that France's problems are over," CMC chief market strategist Michael Hewson said. "Once the euphoria has subsided the next question is likely to centre around as to whether Emmanuel Macron can deliver on his campaign promises of getting unemployment down to 7 per cent, tweak French labour market rules and reduce taxes at a time when over 40 per cent of the French electorate voted for an anti EU candidate, and remain disillusioned with the French political elite."

Commodities

Crude prices shifted higher on Monday after last week's losses as traders continued to peg hopes to the possibility that OPEC will extend production cuts to the end of the year. That optimism, however, continued to be tempered by a continued increase in drilling. Both Brent and U.S. West Texas Intermediate crude futures were higher early Monday. Reuters reported Monday that a panel of OPEC and other allied producers had recommended extending cuts by another six months from June. Last week, Saudi Arabia and Kuwait gave clear signals at a conference in Abu Dhabi that they supported an extension.

Meanwhile, gold prices fell more than 1 per cent to a two-week low on the French election results as investors returned to stocks at the expense of the safe-haven metal. Early Monday, spot gold prices and U.S. gold futures were both down more than 1 per cent. Spot silver prices were also lower. Copper prices, however, rose along with other base metals as the results in France boosted appetite for cyclical assets.

"There's a bit of a risk-on mood after the outcome of the first round of the presidential election in France, which has lent some buoyancy to the prices," Commerzbank analyst Daniel Briesemann told Reuters.

Currencies and bonds

The euro jumped to a five-month high early Monday against the U.S. dollar to its highest level since Nov. 10. The euro also touched a one-month high against the yen on the French election results. The Canadian dollar, meanwhile, was trading higher in early going, helped by oil's gains. A slate of Canadian economic releases will also help give the loonie some direction as the week progresses. Wednesday, Canadian retail sales for February are due, followed by February's reading on gross domestic product for the same month. Economists are expecting a fairly flat reading on both. "A downside risk is that January (retail) was so strong and so another decent monthly gain may be difficult to pull off," Scotiabank economists said in a note.

In bonds, French yields fell to their lowest level in months French 10-year bond yields fell more than 10 basis points to more than three-month lows at 0.74 per cent, while the yield on Germany's safe-haven 10-year Bund yield jumped over 10 basis points to a one-month high at 0.37 per cent.

Stocks set to see action

Roughly 80 firms listed on the Toronto Stock Exchange were scheduled to report results this week. On Monday, Barrick Gold Corp. will release its latest results after the close of markets and hold its annual meeting on Tuesday. Analysts are expecting earnings per share of around 24 cents.

Canadian National Railway also reports results after the close on Monday. Analysts are looking for earnings of about $1.15 a share on average.

Home Capital Group Inc. announced Monday that company founder Gerald Soloway will retire from the company's board once a replacement is found. The company currently faces allegations from the Ontario Securities Commission that it made misleading statements to the public. Those allegations have not been proven and the company says they are without merit. Its shares were down 2.2 per cent in early trading.

Toy maker Hasbro Inc. posted a better-than-expected quarterly profit, partly helped by demand for digital gaming which more than doubled the profit from its entertainment and licensing business. Hasbro earned 43 cents per share, excluding an 11 cent benefit due to the adoption of a new accounting standard. Analysts on average had expected a profit of 38 cents per share and revenue of $822.1 million, according to Thomson Reuters I/B/E/S. Its shares rose 4.8 per cent in early trading.

Shares in Halliburton Co. rose 0.5 per cent in early trading after the company reported quarterly profit and revenue that edged past analysts' estimates as a surge in drilling activity in North America pushed up demand for its pressure pumping and well-construction services.

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Economic News

Canadian wholesale trade declined in February after four months of gains amid weakness in the household goods and food sectors, data from Statistics Canada showed.  The 0.2 per cent decrease was not as steep as the 1.0 per cent decline economists had forecast. Sales volumes fell 0.4 per cent. Economists expect sales to fall by about 1 per cent from January's levels. Later in the week, Canada will see February retail sales and GDP reports.

"In Canada, the highlight of the week will be GDP data for February," National Bank economists said in a lookahead. "The financial services sector probably expanded at a decent pace in line with solid home sales during the month. Manufacturing may also have contributed to growth in light of increases in sales and inventories. However, those gains will likely be offset by weak showings from retail and utilities."

With files from Reuters