Results from the French election showed Emmanuel Macron and Marine Le Pen advancing to a presidential runoff as voters turned their backs on the political establishment. The independent centrist won 23.75% of the vote vs. the National Front leader's 21.53%, in one of the most tightly run races in decades. Polls, that were largely accurate in predicting the first round outcome, suggest Macron is likely to win the next vote scheduled for May 7.

Economy

Markets are breathing a sigh of relief... The euro soared as high as $1.094, hitting a five-month high, while the CAC 40 rose 4% in opening trade. Positive movement is extending across European markets and U.S. stock index futures are all up 1%. The risk-on sentiment has also pushed safe haven assets lower, including treasuries and gold down over 1%.

A communique from the IMF's steering committee said that officials "are working to strengthen the contribution of trade to our economies," but dropped a pledge to resist protectionism. Such language echoes a statement last month from G20 nations, reflecting the Trump administration's call to rethink the global order for commerce.

How to proceed with Greece also "consumed a lot of time" at the IMF's spring meeting and emergency financing from the fund is still an open question. "Fiscal reforms, pension reforms, tax reforms, are only a down payment," said Poul Thomsen, IMF's European department chief. It will take "deep structural reforms, many of which are not yet on the books."

German business morale brightened more than expected in April, hitting its highest in nearly six years. Ifo's business climate index rose to 112.9, from an upwardly revised 112.4 in March, suggesting executives are more upbeat about the current state of Europe's largest economy. "Germany is growing strongly," Ifo chief Clemens Fuest said in a statement.

U.S. Commerce Secretary Wilbur Ross has opened the door to reviving negotiations with the EU, but warned the bloc it would be in competition with China and Japan to do the first deal with the new U.S. administration. He is due to host Cecilia Malmstrom, the EU's trade commissioner, in Washington today for their first meeting to discuss how to proceed with talks over the previously proposed TTIP trade deal.

China stocks tumbled overnight to record their biggest loss of the year, with the Shanghai Composite falling as much as 1.9%, before paring declines to 1.4%. The country's banking regulator said late Friday it will strengthen a crackdown on irregularities in the financial sector, while the nation's top insurance official is being investigated on suspicion of "severe" disciplinary violations.

North Korea said its revolutionary forces are "combat-ready to sink a U.S. nuclear powered aircraft carrier with a single strike... an actual example to show our military's force." It comes as two Japanese navy ships join a U.S. carrier group for exercises in the western Pacific. Pyongyang has also detained another U.S. citizen, bringing the total number of Americans held by the isolated country to three.

Partner or rival? The World Bank and AIIB have agreed to deepen their cooperation with a framework for knowledge sharing, staff exchanges, analytical work, development financing and country-level coordination. The MOU, which discusses more projects to be co-financed in 2017/2018, comes a year after the two multilateral lenders established mechanisms for cost-sharing of investment projects.

With a deadline looming this week to avert a U.S. government shutdown, Congress returns to work today as President Trump leans on Democrats to include border wall funding and warns "ObamaCare is in serious trouble." A healthcare vote could surface this week, along with some type of tax reform announcement, while Saturday will mark Trump's 100th day in office.

Stocks

American retailers are closing stores at a record pace, with 2,880 retail closing announcements this year, more than double the number from the same period in 2016. Just last week, Bebe Stores (NASDAQ:BEBE) said it would close its remaining 170 shops and sell only online, while Rue21 announced plans to close about 400 of its 1,100 locations. If the pace continues, more retailers will close shop than during the 2008 recession.

Amid a cash crunch, Sears (NASDAQ:SHLD) has announced more steps to try to get its financial house in order after shuttering stores to boost its bottom line. The beleaguered retailer has raised its savings goal for this year to $1.25B, is evaluating bids for real estate totaling more than $700M, and will close 92 pharmacies in Kmart stores, along with 50 Sears Auto Centers.

Credit Suisse won't decide on how it wants to raise fresh capital until after this week's annual meeting, SonntagsZeitung reports. The bank is considering a quick-fire share sale or listing 20%-30% of its domestic business in order to raise between 3B-6B Swiss francs. Earlier this month, Credit Suisse (NYSE:CS) offered to cut management bonuses and freeze director pay in an attempt to quash a shareholder revolt.

It's the latest in a string of deals in the medical technology sector, as manufacturers turn to acquisitions to boost profit margins. Becton Dickinson (NYSE:BDX) will acquire C. R. Bard (NYSE:BCR) in a $24B cash-and-stock deal, adding the latter's devices to its portfolio in the high-growth sectors of oncology and surgery. It comes two years after Becton acquired CareFusion for $12B.

PPG Industries has submitted a revised proposal for a combination with Akzo Nobel (OTCQX:AKZOY). "We are extending this one last invitation... to engage with us on creating extraordinary value and benefits for all of Akzo Nobel's stakeholders," PPG CEO Michael McGarry said in a statement. The cash-and-stock transaction is now valued at €26.9B.

A concrete exit... LafargeHolcim's (OTCPK:HCMLY) CEO will leave the company in July, in the wake of allegations the firm paid armed groups in Syria to keep a plant open. "While I was absolutely not involved in any wrongdoing, I believe my departure will contribute to bringing back serenity to a company that has been exposed for months on this case," Eric Olsen declared.

An American Airlines flight attendant has been removed from duty after a video showing an onboard clash over a baby stroller went viral. "What we see on this video does not reflect our values or how we care for our customers," American (NASDAQ:AAL) said in a statement. It comes at a charged time for the airline industry after a passenger was violently dragged off a United Airlines (NYSE:UAL) flight in Chicago.

Apple CEO Tim Cook threatened to have UBER removed from the App Store (NASDAQ:AAPL) in 2015, when he learned that the ride-sharing company had been secretly tracking iPhones (even if users had deleted the app), NYT reports. The article is a wide-ranging profile of Uber CEO Travis Kalanick, describing him as a leader who is willing to break rules to get his way.

Clues about Apple's self-driving car program? Included in documents released by the California DMV are training plans for "operators" to take back control of a self-driving car and signs of an Apple (AAPL) development platform that can "capture and store relevant data" before a collision occurs. However, nothing confirms if Apple aims to build a car from scratch or create a self-driving platform to be used by a partner manufacturer.

According to a new press release, Netflix (NASDAQ:NFLX) intends to offer €1B aggregate principal amount of senior notes through an offering outside the U.S. The company expects to use its net proceeds for general corporate purposes, which may include content acquisitions, capital expenditures, investments, working capital and potential strategic transactions.

Starting this week, a new era for Fox News (FOX, FOXA) begins. Tucker Carlson will assume the network's 8 p.m. slot, marking the first time in nearly two decades Bill O'Reilly will not be kicking off the prime-time lineup. About 3.3M viewers tuned in to The Factor, hosted by Dana Perino once O'Reilly was dismissed, but by Thursday of last week, viewership fell to 2.7M viewers.

Today's Markets

In Asia, Japan +1.4%. Hong Kong +0.4%. China -1.4%. India +1%.
In Europe, at midday, London +1.9%. Paris +4.6%. Frankfurt +3%.
Futures at 6:20, Dow +1%. S&P +1.1%. Nasdaq +1%. Crude +1% to $50.12. Gold -1.3% to $1272.60.
Ten-year Treasury Yield +6 bps to 2.3%

Today's Economic Calendar

8:30 Chicago Fed National Activity Index
10:30 Dallas Fed Manufacturing Survey
11:30 Fed's Kashkari speech