Reports that British forces are succeeding in the southern Iraqi city of Basra and American forces have made a successful foray into Baghdad has Wall Street futures and the European bourses soaring Monday.

Control of the city is still beyond the grasp of invasion forces and street-to-street fighting is still a possibility, but these latest military successes has inspired hope among investors and bode well for a positive day on the equity markets.

London’s FTSE 100 index is up 3.35% in early afternoon trading. Frankfurt’s DAX has jumped5.41%. Paris’s CAC 40 has added 4.73%.

In Asia, markets closed up on the positive news from Iraq. In Hong Kong, the Hang Seng Index rose 1.6%. Tokyo stocks closed more than 2% higher.

Despite hope for imminent victory in Iraq, economists are saying that American investors will have to face a dismal domestic economy, once the jubilation has passed. Just last week the Labor Department reported that the economy shed 108,000 jobs in March, on top of 357,000 lost in February. Later this week, American numbers on retail sales and producer prices will further illustrate the economic tale south of the border.

In Canada, there was one bit of good news released from Statistics Canada. Construction intentions remained strong in February. Municipalities issued a total of $3.9 billion in building permits, down 9.8% from the record high in January, but the decline came on the heels of a record high in January. February’s total remained just 1.4% short of the average monthly level in 2002, which was an exceptional year.