Europe open: Investors seek out safe havens, French polls and Trump in focus

Safe havens were clearly in demand in the last session before the Easter break, as investors in Europe kept a wary eye on the poll results ahead of the first round of voting in the 23 April French presidential elections and digested the contents of an interview with the US president in Thursday's Journal.

As of 0930 GMT the German Dax is off 0.39% to 12,106.74, the Cac-40 is retreating 0.63% to 5,069.01 and the FTSE Mibtel is losing 0.83% to trade at 19,838.87.

In parallel, gold futures on COMEX are up 0.79% to $1,288.20/oz., alongside gains for longer-dated French and German bonds, with the yield on 10-year French government debt down by four basis points at 0.90%.

Acting as a backdrop, in an interview with the Wall Street Journal published overnight, US president Donald Trump said the dollar was too strong, adding he would rather the central bank keep interest rates low. That gave the euro a small boost to 1.0647, which in turn weighed on German stocks.

Deutsche Bank called attention to the latest Ifop-Fiducial poll released on Wednesday, which showed the spread between support for centrist candidate Emanuelle Macron and his far-left rival Jean Luc Melenchon to 4%, versus 11% on 3 April.

"French assets have remained relatively resilient all things considered but should the momentum in the polls continue over the next week then it wouldn’t take much for this story to become the dominant focus for the market again. It’s worth also noting the Le Monde article yesterday in which outgoing President Francois Hollande said that he fears the possibility of a Le Pen-Melenchon second round race," Deutche's fixed asset team said.

Chris Beauchamp at IG chipped in: "First we had the ‘Trump bump’, then the ‘Trump slump’, now we perhaps have a Trump volte-face?’ A major interview last night marked a remarkable turnaround in a host of issues, including China, NATO and economic policy. [...]

"As a result, markets are continuing to unwind the rally that has dominated in stocks since November, while the US dollar is in retreat across the board. It is, of course, folly to try to work out policy from the president’s statements, but the shift to safe havens goes on, with low volumes ahead of a long weekend amplifying the moves."

Competing for investors' attention on Thursday would be the latest quarterly updates from three of America's biggest banks: JP Morgan, Citi and Wells Fargo, which were due to be published later in the day.

Revised data for Germany's harmonised CPI in March has come in just as expected on Thursday morning, revealing a rise of 1.5% in annualised terms.

In France, the harmonised CPI clocked in at 1.4%, which was also as expected, but an identical reading in Italy was slightly ahead of the 1.3% which analysts had forecast.

After rising earlier in the week on strong traffic numbers, shares in Lufthansa were moving lower, weighed down by a Bloomberg report that investor Infinite Miles had sold a 2.5% stake in the German airline.

French grocer Carrefour on the other hand has reported higher first-quarter sales and confirmed its full-year outlook for revenue growth.