* A look at the day ahead from European Economics and Politics Editor Mark John and EMEA financial markets specialist editor Nigel Stephenson. The views expressed are their own.
LONDON, April 21 (Reuters) - The killing claimed by Islamic State of a policeman on the Champs-Elysees last night has thrown yet more uncertainty into an already hard-to-read French presidential contest. Some candidates have called off final rallies ahead of Sunday's first round on security concerns, while others insist life must go on.
Far (Hamburg: FA6.HM - news) -right Marine Le Pen (Other OTC: PENC - news) , who has been edged out of first place in opinion polls in recent weeks by centrist Emmanuel Macron, is hitting social media with messages like: "The battle against terrorism starts by claiming back our national borders and stopping this naivety." That may yet resonate with some.
Under French election law, however, no opinion polls can be published after Friday midnight so we may not know how voters are reacting to this latest attack until Sunday night's exit polls. The attack was cited as one factor hitting the euro in overnight trade, as were concerns that turnout could be low and so favour a shock result. Francois Hollande's government is holding a meeting with security chiefs this morning.
Two economic events to keep an eye on today: euro zone flash PMIs for April are due out this morning, with analysts expecting them to ease off slightly in Germany and France; later, after markets close, ratings agency DBRS will give its latest judgment on Portugal - as ever, the question being whether Lisbon will retain its investment-grade rating.
MARKETS AT 0755 GMT Markets' focus is clearly on the French presidential election, whose first round is on Sunday, although there has been limited reaction to Thursday evening's fatal shooting of a policeman in Paris. French 10-year government bond yields are up 1.1 basis points, against 0.1 bps in German equivalents, pushing the spread between the two marginally wider.
Futures prices suggest French stocks will open marginally lower compared with a slight rise in Germany’s DAX. The euro is flat versus the dollar but not far from Thursday's three-week high. Traditional safe-haven assets such as gold (down 0.1 percent) and the yen (flat at 109.30 per dollar) are also muted.
European shares are expected to open slightly higher, with the STOXX 600 index potentially heading for a third day of gains.
Stock movers/company news: Danone (LSE: 0KFX.L - news) raises 2017 EPS forecast after WhiteWave acquisition; Saipem (LSE: 0NWY.L - news) sticks to FY guidance as Q1 earnings slide; U.S. Fed fines Deutsche Bank (IOB: 0H7D.IL - news) $156.6 million for forex violations; Canada's SNC (Shenzhen: 002246.SZ - news) -Lavalin to buy WS Atkins (Frankfurt: 912859 - news) in C$3.6 billion deal; Philips Lighting Q1 earnings beat on small sales decline; AccorHotels eyes recovery in France as revenue jumps; GSK must pay $3 million in generic Paxil suicide lawsuit: U.S. jury; BP mulls sale of stakes in Canadian oil sands (Other OTC: COSWF - news) assets –sources; Restaurant Group (Other OTC: RSTGF - news) finance chief to leave after less than a year.
Asia-Pacific shares outside Japan are up 0.6 percent and Tokyo closed up more than 1 percent, lifted in part by comments from U.S. Treasury Secretary Steven Mnuchin that a tax reform would be unveiled “very soon”.
Oil prices are up slightly and heading for their biggest weekly drop in a month. Brent crude was last up 9 cents at $53.08. Copper is up 0.8 percent at $5,668 a tonne.
Emerging stocks have inched half a percent higher to three-day highs and currencies are almost unchanged against the dollar. Chinese mainland stocks, however, posted their worst week of 2017 so far, down 2.2 percent after regulators signalled their intention to tighten market scrutiny. EM equity and bond funds took in $650 million and $1.3 billion respectively in the past week, but the inflow momentum is slowing, JPMorgan (LSE: JPIU.L - news) data showed.
Russia's 10-year bond yield is at a new three-year low of 7.81 percent and the rouble is holding firm even though oil prices are set for their biggest weekly fall in a month.
Amid jitters over the French election, euro crosses of eastern Europe have underperformed this week, with the Czech crown trading just off two-week lows after it weakened on Thursday to test the former cap level of 27 per euro. The Polish zloty is at a one-month low despite robust economic data.
Markets will be watching Nigerian non-deliverable forwards after the currency strengthened in the black market, narrowing the gap with the official rate, following dollar sales by the central bank.
* Global flash April PMIs
* Italy Feb industrial orders/sales
* Euro zone Feb current account
* UK March retail sales
* Canada March CPI
* U.S. March existing home sales
* IMF/World Bank spring meetings (to 23rd)
* DBRS reviews Portugal
* (Editing by Catherine Evans)