* Wall Street's "fear gauge" at historic lows
* Active Fed supporting dollar
* Bond yields on the rise
By Jamie McGeever
LONDON, May 9 European stocks and global bond
yields rose on Tuesday, with investor sentiment bolstered by
historically low U.S. stock market volatility, last weekend's
French presidential election result and solid corporate
Europe's index of leading 300 shares rose 0.5
percent to a near-two year high of 1,555 points, Germany's DAX
rose 0.7 percent to a record high, and Britain's FTSE
100 added 0.6 percent.
Asian stocks did not perform as well, with China's seventh
consecutive decline - the longest losing streak for
four years - weighing on the region more broadly.
U.S. futures pointed to a slightly higher opening on Wall
That would see the S&P 500 move beyond Monday's
all-time record 2,401 points as the VIX index of implied
volatility on the index - dubbed the Wall Street "fear gauge" -
remained below 10.00, anchored near Monday's lowest closing
level since December 1993.
"It's calm sailing today for stock markets," ETX Capital
senior markets analyst, Neil Wilson, said.
Victory for business-friendly centrist Emmanuel Macron in
France and earnings were also supportive for equities, he said,
adding: "So far, there is precious little to halt the rotation
from bonds to stocks."
The FTSEuroFirst hit its highest for nearly two years, and
the index of top 50 euro zone stocks its highest for
In Germany, shares in Commerzbank rose more than
2.5 percent after it posted forecast-beating profits in the
first quarter, and mining companies were among leading gainers
MSCI's broadest index of Asia-Pacific shares outside Japan
slipped 0.1 percent and Japan's Nikkei
fell 0.26 percent.
The MSCI World index, which touched a record
high overnight, dropped about 0.1 percent.
FED UP, OTHERS STILL
In bond markets the 10-year U.S. Treasury yield rose to
2.394 percent, its highest in a month. The two-year
yield held steady at 1.33 percent, meaning the yield
curve rose to its steepest for more than two weeks.
German yields rose by 1-2 basis points and the
10-year British gilt yield rose around 4 basis points
The U.S. yield curve had flattened last week to its lowest
since the presidential election in November as investors fretted
over the impact that higher interest rates will have on the
Another hike in June is almost certain, according to market
pricing, and investors now appear more convinced that the
economy will take that in its stride, which could give the
Federal Reserve more room to carry on tightening.
"For the most part, developed country central banks are
pretty static when it comes to monetary policy," Standard Bank's
head of G10 strategy in London, Steve Barrow, said. "Only the
Fed is actively changing interest rates."
The positive sentiment also boosted the dollar.
It rose 0.5 percent against the yen to 113.80 yen and
the euro fell 0.2 percent to $1.0895, another sign of its
vertigo near $1.10. The dollar index was up 0.3 percent
In commodities, oil market sentiment swung between optimism
over statements from major oil-producing countries that supply
cuts could be extended into 2018 and lingering concerns over
slowing demand and a rise in U.S. crude output.
U.S. crude rose 0.2 percent to $46.53 a barrel, and
global benchmark Brent also rose 0.2 percent to $49.43.
Copper bounced from the four-month low touched on Monday
after data showed a sharp drop on imports into China, the
world's biggest consumer. London copper rose 0.5 percent
to $5,515 a tonne on Tuesday, after falling to as low as
$5,462.50 on Monday.
Gold recovered from a seven-week trough touched on Monday.
Spot gold rose about 0.1 percent to $1,226.60 an ounce.
(Editing by Louise Ireland and John Stonestreet)