Saikat Chatterjee shows you a glimpse at tomorrow’s markets.

Only a few hours of relief at the fact that far-right candidates did not win the French first round presidential election was enough to last a while. French stocks have a poor start, while the euro has fallen back to Friday’s levels.

The risk premiums on French assets will not decrease as Emmanuel Macron, French president, and Marine Le Pen are both qualified on Sunday to contest what promises be a close-fought presidential election race on April 24.

The inexorable rise in U.S. Treasury yields is perhaps a bigger concern. Stock futures are pointing towards a worse start in Europe, the United States and elsewhere. Meanwhile, so-called growth stock sectors — such as tech — have been on the decline.

The ten-year Treasury yields rose to 2.7840% on Monday in Asian time, the highest level since January 2019. This is a 125-basis-point increase so far in this year.

In addition, the yield has surpassed Chinese government borrowing costs for 12 years for the first-time in 12 year. However, the previous vaulted to above 100 for only the second time since May 2020.

As inflation data rose higher in Asia, Chinese stocks were the largest laggards, threatening hopes of Beijing’s aggressive easing policy.

Many key data points are available this week that will occupy traders. This includes the U.S. consumer inflation figures for March (due Tuesday). The fallout from energy costs resulting in the conflict in Ukraine is expected to result in a headline print exceeding 8%.

Next, Thursday’s European Central Bank gathering will find policymakers trapped between record high inflation levels and the economic impact of the war. The cumulative rate increases for the remainder of this year are being priced in by the money markets at around 70 basis points.

Investors will finally get to see the results of the quarter’s first quarter this week.

Markets should be more informed by key developments on Monday

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