Markets Are "Mixed" as Oil Spikes With U.S.-Iran War Escalating, Says Scotiabank
The fresh week is starting off in "mixed" fashion, said Scotiabank.Oil is up by about US$3/barrel in terms of WTI and Brent after the United States and Iran exchanged blows and Israel continues to expand its war in Lebanon, which makes a deal with Iran even less likely, noted the bank.President Donald Trump keeps talking about a deal that is simply not credible and sounds more like a vain attempt at controlling energy prices as Iran digs in against giving up uranium and control of the Strait of Hormuz, stated Scotiabank. Iran remains aligned with the 'managed irresolution' strategy in a U.S. election year during which the Trump administration has entered a conflict from which there doesn't appear to be a credible exit.Bonds are broadly cheaper with sovereign yields up by 2bps-5bps across maturities and markets, added the bank.Stocks are mixed, with North American futures clinging to small gains versus flat overall European cash markets, according to Scotiabank. The US dollar (USD) is broadly firmer, but mostly against lower-weighted crosses.