US pre-open: Stocks seen firmer on French election relief

US futures pointed to a solid open on Wall Street on Monday as investors welcomed the outcome of the first round of France's presidential elections.

At 1120 BST, Dow Jones Industrial Average and Nasdaq futures were up 1% while S&P 500 futures were 1.1% higher.

In currency markets, the dollar was down 1.3% versus the euro at 0.9200, after the single currency hit a five-month high against the greenback on the back of the election results. The dollar was 1.1% firmer versus the yen at 110.23 as the risk-on trade meant investors moved away from safe-haven assets. Against the pound, the greenback was flat at 0.7802.

Investors were hopeful that centrist Emmanuel Macron will beat off far-right nationalist and eurosceptic Marine Le Pen in the second round of the French election. With 97.43% of votes counted, Macron had 23.86% to Le Pen's 21.43%.

Joshua Mahony, market analyst at IG, said: "The French political structure means that we were always going to see a second round, and the divisive nature of Le Pen meant that by and large, any of the others would be favourites against her. In Macron, we see the strongest opponent pitted against Le Pen, in what is likely to be the final vote of confidence for the EU in what was always going to be a critical year for the future of Europe. While this result was widely anticipated, we are seeing a substantial amount of hedges unwound this morning with most seeing this as the end of the political upheaval, hence the sharp gains for European stocks and the euro.

"Donald Trump’s weekend tax tweet may have got lost amid a wider focus on the French election, but his promise to announce a big tax reform on Wednesday points towards another big week for the markets. There were fears that the recent knockback on healthcare reforms may have stopped Trump in his tracks, yet this week’s announcement will put the bulls in the driving seat even when the French feel-good factor has faded."

The US President tweeted on Saturday that a big tax reform package will be announced on Wednesday.

In corporate news, Hasbro, Halliburton and Kimberly-Clark were due to report earnings before the opening bell.

On the macroeconomic front, the Chicago Fed national activity index is at 1330 BST. Meanwhile, FOMC member Neel Kashkari will appear in a moderated discussion at UCLA Anderson School of Management at 2015 BST.