• Euro jumps as high as $1.0940 in Asia, yen slips broadly
• Macron wins first round in French election, far ahead in polls
• Safe-haven Treasuries, gold fall as risk hedges unwound
• Oil prices inch up after steep losses last week

SYDNEY: The euro briefly vaulted to five-month peaks on Monday after the market's favored candidate won through the first round of the French election, reducing the risk of a Brexit-like shock and sparking a mass unwinding of safe-haven trades.

E-mini futures for the S&P 500 climbed 0.8 percent in early trade, while yields on 10-year US Treasury notes rose almost 8 basis points to 2.31 percent.

Japan's Nikkei jumped 1.3 percent as the yen retreated, while MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent.

Shanghai shares, however, fell 1.5 percent after state media signaled Beijing would tolerate more market volatility as regulators clamp down on riskier financing.

In France, Centrist Emmanuel Macron took a big step toward the presidency on Sunday by winning the first round of voting and qualifying for the May 7 runoff alongside far-right leader Marine Le Pen.

The outcome lessens the risk of an anti-establishment shock on the scale of Britain's vote to quit the European Union with Macron widely tipped to win the final vote and keep France in the union.

Opinion polls put Macron ahead by over 20 points, a lead so large that a repeat of the Brexit surprise seemed highly unlikely.

Investors had feared for the single currency's future if one of the far-left candidates had gotten through to fight Le Pen. The euro jumped in relief, and was last up 1.1 percent at $1.0845, having been as far as $1.0940, the highest since early November.

The safe-haven yen slipped across the board with the euro surging 2 percent to 119.32 yen while the US dollar gained 0.9 percent to 109.99 yen. Likewise, gold fell 0.7 percent to $1,274.70 an ounce.

"The rise of the euro and risk appetite rebounding is understandable and this should also see yields in Europe fall, spreads to Bunds tighten and stocks rally," said Tim Riddell, an analyst at Westpac.

"However, such gains are likely to be contained when markets reflect upon the marked shift away from the "establishment" and just how effective the new president may be," he added.

SCEPTICAL ON TAX

Wall Street on Friday had only a modest lift from news President Donald Trump would announce the broad outline of his proposed tax package on Wednesday.

"Markets are skeptical that the real details will be forthcoming," said analysts at ANZ in a note.

"There is also plenty of conjecture about whether any tax cuts will be able to be revenue neutral, and that could affect their ease of passage through Congress."

The Dow ended Friday down a minor 0.15 percent, while the S&P 500 lost 0.30 percent and the Nasdaq fell 0.11 percent.

Investors were also keeping a wary eye on tensions in the Korean peninsula.

North Korea said on Sunday it was ready to sink a US aircraft carrier to demonstrate its military might, in the latest sign of rising tension as Trump prepared to call the leaders of China and Japan.

South Korea responded by asking Washington about holding joint drills with the USS Carl Vinson aircraft carrier strike group as it approaches waters off the Korean peninsula.

Oil prices recouped just a little of last week's hefty losses, still weighed by signs US production and inventory growth were offsetting OPEC's attempts to reduce the global crude glut.

Brent futures were up 29 cents at $52.25 a barrel, while US crude futures added 24 cents to $49.86.