MORNING BID- Staying high

April 7 – A look at the day ahead from Danilo Masoni.

After European shares reclaimed pre-pandemic levels in a record-breaking session and Wall Street closed near all-time peaks, markets look like they may hit pause today, even though there seems to be nothing out there to stop the party.

Japanese household confidence at an eight-year high is the latest sign that pain from the pandemic is healing while ECB policymaker Pierre Wunsch said the euro zone was poised for five-year consumption boom once households can spend freely again.

Citi’s economic surprises indexes for Europe, U.S. and G10 countries have been in positive territory for at least nine months while the Q1 corporate reporting season that kicks off later this month is predicted to show European and U.S. profits surging 47% and 24% respectively.

Unsurprisingly, the term “melt-up” is making appearances again in market commentary. UBS wealth managers are telling investors they should “not fear entering the market at all-time highs”. Deutsche Bank strikes a discordant note, predicting a 6-10% “consolidation” in equities.

That said, European and U.S. stocks may stay muted after Tuesday’s buoyant session, though Asian stocks earlier hit a 3-week high. The dollar, meanwhile, has softened to a two-week low as Treasury yields slipped further off recent highs.

In focus are March services and composite PMIs from Europe and the minutes from the U.S. Federal Reserve’s March meeting.

On the corporate front, M&A remains in the headlines. Power group EDF’s shares could rally 10% after sources said France’s government could spend around 10 billion euros to buy out minority shareholders.

Toshiba soared 18% after saying it is considering a $20 billion offer from private equity firm CVC Capital Partners.

Finally, Deliveroo is on the radar, as retail investors can start trading the stock today, a week after its dismal IPO. Shares may open as much as 3% lower.

Key developments that should provide more direction to markets on Wednesday:

* Final PMIs

* China FX reserves March

* Samsung Electronics said Q1 profit likely rose 44%

* IMF Managing Director Georgieva and World Bank President Malpass speak at IMF/World Bank spring meetings

* German 5-year bond auction

* UK 5-year and 25-years gilt auctions

* Reserve Bank of India kept interest rates steady

* National bank of Poland, Bank of Thailand meetings

* St. Louis Fed President James Bullard speaks 1500 GMT

* U.S. goods trade balance Feb/consumer credit

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