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FINWIRES

Risk Appetite "On the Run" As Middle East Tensions Flare Again, Says Scotiabank

-- Risk appetite is "on the run" to start the fresh trading week, said Derek Holt, Vice-President & Head of Capital Markets Economics, at Scotiabank in his 'Daily Points' note Monday.

Holt noted oil was up by 5%-6% a barrel, while United States equity futures were down by about 0.5%, with European equities down by about double that amount.

He also noted the US dollar (USD) was slightly firmer against most majors except for the Canadian dollar (CAD or loonie) and Norway's krone (NOK), while sovereign bond yields were up by around 2bps to 6bps across regions and maturities, with Europe underperforming U.S. Treasuries.

On geopolitics, Holt said U.S. President Donald Trump appears to have "grossly overstated" progress toward an agreement with Iran on Friday.

Other than that there was, he added, very light calendar-based risk through the overnight. German producer prices soared in March (+2.5% m/m, consensus 1.4%). China left the 1- and 5-year Loan Prime Rates unchanged at 3% and 3.5% respectively which surprised no one.

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