European Stocks Head for Biggest Rise in Two Months

European stocks headed for their biggest rise in two months on Monday as investors snapped up cut-price retail and tech stocks and France’s shares and bonds cheered a meaty parliamentary majority for pro-business President Emmanuel Macron.

Europe’s banks jumped too, following broker upgrades for Credit Suisse, while there was little sign of tension for the sector or for the pound or euro as formal Brexit negotiations kicked off in Brussels.

Projections showing that Macron had won a commanding majority in France’s weekend vote saw Paris stocks make a 1.1- percent gain as the country’s bonds also outperformed in fixed- income markets.

“We expect the Macron reforms to transform France like the Thatcher reforms had cured the erstwhile sick man of Europe, the United Kingdom, some 35 years ago,” said Berenberg European economist Holger Schmieding. “And like the ‘Agenda 2010′ reforms had turned Germany from one of the weakest into one of the strongest economies in Europe almost 15 years ago.”

Asia had kicked off the week strongly as well with a two-week closing high for Japan’s Nikkei and 0.3 – 0.7 gains for Australian and South Korean KOSPI. Chinese and Hong Kong stocks jumped 1 and 1.2 percent ahead of a decision by index provider MSCI on Tuesday, expected to see it add mainland-listed Chinese stocks to its top share benchmarks for the first time.

Chinese data had also helped, with tight liquidity conditions looking to have eased and home prices up 10.4 percent in May from a year ago, although slowing from April’s 10.7 percent gain.

“Generally, the environment still remains fairly positive for risk appetite,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group in Singapore.

Europe’s retailers also clawed back some ground, having been clobbered along with U.S. peers like Wal-Mart and Target on Friday by net-giant Amazon’s $13.7 billion deal to buy upscale grocer Whole Foods Market.

It was Amazon’s first major bricks-and-mortar acquisition in the sector and spooked traders on worries it could now be going hard after the traditional grocers.

In the currency markets, the differing messages of the world’s major central banks on inflation and monetary policy prodded the dollar higher against the yen ahead of a series of appearances by U.S. Federal Reserve officials this week.

Fed chief Janet Yellen’s confidence as her team raised interest rates for the third time in six months last week surprised investors who had expected more caution about the economy.

Sterling also nudged higher at just over $1.28 and 87.42 pence per euro ahead of the formal start of negotiations on Britain’s planned exit from the European Union, expected to generate plenty of headlines for the currency in the weeks ahead.

Brexit Secretary David Davis started negotiations in Brussels on Monday, which will be followed by a Brussels summit on Thursday and Friday where Prime Minister Theresa May will meet – but not negotiate with – fellow European Union leaders.

Sec. Davis’s agreement to Monday’s agenda led some EU officials to believe that PM May’s government may at last be coming around to Brussels’ view of how negotiations should be run. Her own political survival is in doubt after she lost her Parliamentary majority in an election this month.

The euro was steady at $1.1195, retaining Friday’s 0.5 percent gain. The dollar index, which tracks the greenback against a basket of six global peers, was also little changed at 97.182.

The market is awaiting comments by New York Fed President William Dudley, a close ally of Yellen’s, when he speaks at a business roundtable in New York State.

“In the wake of Friday’s weak U.S. data, Dudley could provide insight into whether the Fed is still poised to continue normalizing monetary policy,” said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.

In commodities, oil futures lingered near six-week lows over concerns about a supply glut amid faltering demand.

U.S. crude slipped 0.35 percent to $44.58 a barrel, while global benchmark Brent dropped 0.3 percent to $47.21.

Gold touched a 3½-week low earlier in the session and was trading down slightly at $1,250 an ounce.