Europe open: Traders eye political risk amid strong manufacturiing data

European indices began the new quarter on a mixed note, amid strong readings for the euro area's manufacturing sector (perhaps a tad too much so) as investors continued to closely monitor polictical risks, traders nevertheless appeared to be largely upbeat.

"Having seen European stocks closed the quarter in a rather subdued fashion doesn’t change the fact that we’ve still seen a fairly positive start to the year with record highs for US and UK markets, despite concerns at the outset of political instability in Europe, the health of the banking system, and the first faltering steps of a Trump Presidency, not to mention last week’s triggering of Article 50 by the UK," said Michael Hewson, chief market analyst at CMC Markets UK.

As of 0855 GMT, the benchmark Stoxx 600 was up by 0.19% or 0.73 points at 381.87, alongside gains of 0.30% for the German Dax to 12,350.32, while the Cac-40 came off by 0.08% to 5,118.44.

Traders eye inflation pressures, political risk

A preliminary reading from IHS Markit on its Eurozone manufacturing sector purchasing managers' index for March was confirmed at 56.2, with all of the main sub-indices close to six-year highs.

However, delays to supplier deliveries were also running near six-year highs, the survey compiler warned.

IHS Markit chief business economist Chris Williamson said: "These delays send a warning signal about rising inflationary pressures, as busy suppliers are often able to hike prices. Prices charged for goods leaving the factory gate are consequently rising at the fastest rate since mid-2011."

Not everyone was quite as worried, not by inflation at least, with economists at Barclays telling clients early on Monday that the ECB continued to be wedged between improving growth prospects and sticky, lacklustre underlying inflation conditions.

"We continue to expect the ECB to go ahead with the normalization of monetary policy conditions but to remain careful to not overdo it," Barclays said.

On the other hand, they cautioned that "Italy could become a next catalyst for risk aversion especially in the periphery; absent voting system reform, risk of anti-euro sentiment or a hung Parliament rises."

Indeed, yields on benchmark Italian 10-year bonds rocketed higher on Friday.

In all things France, over the weekend centre-right presidential candidate Francois Fillon turned his fire on centrist Emmnanuel Macron as one poll showed his contender was now the favourite going into the first round of voting on 23 April.

That was ahead of the second televised debate between the main presidential candidates scheduled for the next day.

According to a poll from BVA, on Saturday, Macron was now projected to come away with 25% of the ballot in the first-round vote, followed by Le Pen at 24%, with Fillon at 19%.

French car registrations see good growth

Car registrations in France grew by 7% in March, according to data from the CCFA automobile association.

German biotech outfit Sartorius said full-year 2017 sales were set to rise by between 12% to 16%, higher than the previously expected range of between 8% to 12%, alongside better-than-expected operating margins.

Regulators in Germany reportedly found a new defeat device for emissions tests installed on a Fiat car.