London — European stocks and the euro pulled back on Monday from highs touched after Emmanuel Macron’s emphatic but well-flagged victory in France’s presidential election as investors’ focus shifted from politics to monetary policy. With the political risks that have dominated European markets in a year packed with elections expected to recede, the European Central Bank (ECB) is expected to have more room to tighten policy as the eurozone economic recovery gathers pace. European equities dipped, with French shares, which hit nine-and-a-half-year highs on Friday, underperforming the wider market. The euro dipped against the dollar, having risen in early Asian trade to just above $1.10 when opinion polls signalled the scale of Macron’s victory over anti-euro nationalist Marine le Pen. It was a similar story in eurozone government debt markets: the premium investors demand to hold French rather than German benchmark 10-year bonds narrowed to its tightest in six months as markets opened...
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