LONDON (AP) — European stocks have started the week strongly, with British shares rising thanks to a sharp drop in the pound, which helps the country's exporters and multinationals. The closure of German markets for a public holiday also allowed traders to take a breather from recent worries over the health of Deutsche Bank and the wider European banking system.
KEEPING SCORE: In Europe, France's CAC 40 was up 0.3 percent while Britain's FTSE 100 rose 1.2 percent to 6,981. U.S. shares were for a flat opening, with Dow futures and the broader S&P 500 futures up less than 0.1 percent.
FTSE SURGE: British shares have posted big gains in the wake of the fall in the pound, which was trading 0.8 percent lower at $1.2882. The drop in the currency followed comments from Prime Minister Theresa May that the formal process by which Britain leaves the European Union will commence by March next year and her signal that her government would prioritize controls on immigration over access to the European single market. The fall in the pound helps the earnings potential of many of the index's international companies.
NO DAX, NO DEUTSCHE: Another reason why European markets have started the week solidly is the fact that Germany's DAX index is closed for a national holiday. That means traders have been able to park their worries about Deutsche Bank. The bank's financial difficulties have been a source of concern in markets for a few weeks. Germany's biggest lender has tried to reassure investors about its financial health. Investors hope Deutsche Bank will be able to negotiate down the massive cost of settling a U.S. investigation into mortgage securities. Investors had been concerned about not only its plunging stock price, but the potential effect on the financial system if Deutsche Bank gets into serious trouble and the German government does not help it out.
ANALYST TAKE: "The bullish activity in markets this morning has been helped in no small measure by the closure of German markets for a holiday, which has had the beneficial effect of sparing us any Deutsche Bank headlines," said Chris Beauchamp, market analyst at IG.
US FOCUS: The U.S. economy will be a key focus in markets this week. A raft of economic data culminates with the monthly jobs report in the U.S. on Friday, a release that could go a long way to determining whether the Federal Reserve will raise interest rates again this year.
TANKAN: The Bank of Japan "Tankan" quarterly survey of business sentiment released Monday showed no change among major manufacturers. The Japanese economy has been stagnating for years, but hopes are high that the central bank's easy lending will pull growth out of the doldrums.
ASIA'S DAY: Japan's benchmark Nikkei 225 gained 0.9 percent to finish at 16,598.67. Australia's S&P/ASX 200 rose 0.8 percent to 5,478.50. Chinese and South Korean markets were closed.
ENERGY: Oil prices continued to rally in the wake of last week's agreement by the members of the OPEC cartel to trim production. Benchmark U.S. crude oil was up 48 cents to $48.72 a barrel while Brent crude, the international standard, rose 49 cents to $50.68 a barrel in London.
CURRENCIES: The euro was flat at $1.1236 while the dollar was unchanged at 101.33 yen.