Market sentiment and what to expect

European stocks opened firmly higher Monday as investors shrugged off the impact of the weekend's global cyber attack and focused on improving corporate earnings and a stabilizing political landscape across the region.

Investors reacted to a surprisingly solid win for Chancellor Angela Merkel's CDU party in a regional election in North Rhine-Westphalia, the country's biggest state.

The win cements Merkel's lead over her socialist rival, former European Parliament President Martin Schulz, in the run up to Germany's federal elections in the fall.

The early market moves followed a solid, though cautious, session for Asia equities, which saw investors rattled by both the spread of last week's global cyber attack and ongoing tensions between the White House and the country's intelligence services.

North Korea's weekend testing of a ballistic missile has also added to the market's nerves, taking gold prices higher, but the concern couldn't cap gains on regional equity markets and the MSCI Asia ex-Japan index notched a solid 0.48% advance by 08:30 BST. Japan's Nikkei 225, however, slipped 0.1% to 19,869.85 points as a firmer yen held down gains for export-focused stocks.

U.S. Treasuries remained firmly in favor, as well, with investors moving into safe-haven assets and extending Friday's rally, which followed softer-than-expected inflation and retail sales data, taking benchmark 10-year yields to 2.32%. However, yields quickly backed-off after the firm start to European trading and were last seen 2 basis points higher at 2.34%.

The dollar was on the back foot for much of the overnight session, owning in part to the U.S. Treasury market rally but also to safe-haven moves into the yen as investors reacted to the North Korean missile news, which came just days after the election of a new president in South Korea.

The dollar index, a measure of the greenback's strength against a basket of six global currencies, was marked 0.1% lower at 98.79, while the euro edged 0.1% higher to around 1.0939 and the pound remained firmly bid over the 1.2930 mark against the dollar. Gold was also active, with prices rising 0.2% to just over $1,230 per ounce.

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