Oil runs red, bleeding into broader risk......>

FOREX: Oil runs red, bleeding into broader risk appetite

- Risk off returned with force Tuesday as equities sank. Continued acute

volatility in the front-end of the oil curve has rattled markets further as the

far more liquid and heavily traded Jun'20 WTI contract sank sharply. The rot

that began in the close-to-expiry May'20 contract spread to the Jun'20 price

Tuesday, leaving prices below $12/bbl at some points of the day and down more

than 50% since the Friday close. This fed through to AUD, CAD and NOK weakness

with markets boosting JPY and USD in response.

- EUR outperformed well as the Italian PM Conte softened his stance toward

establishing a credit line with the ESM as a preferred method of finance. This

would avoid some of the disagreements surrounding debt mutualisation, which will

likely be discussed further Thursday. EUR/GBP countered the recent bearish trend

as the cross narrowed the gap with April highs.

- UK and Canadian inflation data crosses Wednesday as well as the Turkish

central bank rate decision. The CBRT are seen trimming rates by 50bps.