The market driver on Monday is news of a peace framework between the United States and Iran that has the advantage of getting oil flowing through the Strait of Hormuz at least for now, said Scotiabank.
Oil was down by almost US$5/barrel to the low $80s in WTI and Brent terms, while the oil futures curve remained well above pre-Iran war levels as "a material shock remains intact amid ongoing vulnerabilities", noted the bank.
The same goes for gasoline futures into the summer driving season, thin inventories and strained capacity across refineries, it also noted.
That's driving a well-timed rally in sovereign bonds ahead of the week's deluge of central banks, especially the Federal Reserve, with most global benchmark yields down by about 2bps to 7bps as curves mildly bull steepen, Scotia said.
Stocks were broadly higher by 0.75% to almost 2% across North American futures and around 1% across Europe, except for London, which was little changed with the Starmer administration stoking U.S. trade tensions by following others with an under-16 year old social media ban, Scotiabank noted.
The US dollar (USD) was broadly retreating as most major crosses appreciate, although with mild underperformance by oil-crosses like the Canadian dollar (CAD or loonie) and Norway's krone (NOK), it also noted.