Risk sentiment has been more constructive - Scotiabank

Analysts at Scotiabank explained that global risk sentiment appears more constructive at the start of the week.

Key Quotes:

"Investors sense that more policy stimulus may be on the horizon."

"Japan PM Abe’s win in the weekend upper house election, giving his conservative coalition a “super majority”, is expected to be followed, quickly, by additional stimulus measures."

"Expectations are running high that the BoE policy meeting Thursday will see renewed easing while the BoC is likely to keep rates on hold but its language around the policy outlook will have to reflect headwinds for domestic growth that have emerged recently."

"US 30-year bond yields are at record lows today and Japanese 20-year bond yields reached 0.0% for the first time."

"Commodities are somewhat mixed in this environment; gold and crude have slipped while copper has recovered, for example"

"In the G-10 FX space, the USD is making broad headway; the JPY is the main casualty on the day, the GBP remains under broad pressure – but has stayed a little ahead of the JPY."

"We look for the USD remain well supported overall following the firm NFP report"

"Fed speakers this week may provide some insight into FOMC thinking but it is unlikely that the robust data moved the policy dial far from the neutral position; for the USD, however, the key issue is that the Fed is not easing and that will give it a distinct advantage running through H2, we expect"

"USDCNY remains firm but the onshore/offshore spread continues to track a very contained spread, suggesting moderate – or managed – pressure on the CNY currently. Note Q2 GDP data are released Friday."