In France, we are down to two candidates: Macron v.s. Le Pen.

And the market likes the sound of that second-round contest, looking for a Macron victory.

French banking stocks surging, and that's driving CAC 40 up 4% at the open.

Risk-on is not just confined to France, however.

Italian shares up more than 3% at the open, with even London's FTSE 100 up over 1.5%.

Euro climbed above 1.09 in Asia against the dollar—a five-month peak.

Single currency remains at 1%, around 1.083.

Euro has also sharply rallied against the pound and rose briefly against yen 120

—its highest level since late March.

There's also a big reaction in bonds,

with the premium for French 10-year paper shrinking to less than 50 basis points over German bunds.

This spread was back near 80 basis points last week.

And the question is: how soon do we see this relationship revert to the 30 basis-point area that largely sufficed before November?

A snap poll shows 62% support for Mr. Macron, and only 38% for Ms. Le Pen.

That's the kind of spread the market really likes to see.