Market Brief, North America

Financial markets are in calm-before-the-storm mode ahead of a raft of economic data releases that are expected to show the US economy outperforming its advanced-economy peers, and before Americans head to the polls to choose the next president. The dollar is holding recent gains, Treasury yields are down slightly, equity futures are little changed, and oil prices are steadying after yesterday’s steep descent. The pound is trading sideways ahead of tomorrow’s Autumn Budget, and deteriorating cross-Atlantic rate differentials are keeping pressure on the euro. The Canadian dollar remains firmly on the defensive, pressured by weak domestic fundamentals, widening yield spreads,...

De-risking activities are dominating trading activity in financial markets this morning as participants brace for what could be the most momentous fortnight of the year. Treasury yields are climbing once again, with the ten-year now yielding 4.25 percent, the dollar is advancing against its major peers, and trade-sensitive currencies – like the Canadian dollar and Mexican peso – are flirting with year-to-date lows. Crude prices are down sharply after Israeli aircraft struck military targets in Iran over the weekend, avoiding any obvious harm to the country’s energy infrastructure and giving Tehran room to avoid another round of escalation. Implied volatility...