Market Brief, North America

With First Republic Bank shares recovering ground even as a rescue looks increasingly plausible, regional lender indices are climbing, and yesterday’s slow-motion flight to safety is unwinding across the financial markets. With renewed troubles in the banking sector seen reducing the Federal Reserve’s room for manoeuvre, yields are under pressure across the front end of the curve, and the dollar is falling back after posting its biggest daily gain since early March. The pound and euro are steamrolling higher on improved rate differentials, while the credit condition-sensitive Canadian dollar is struggling to lift itself off the mat after yesterday’s bruising defeat....

Renewed concerns over the health of the global banking sector are driving investors toward safe havens this morning, lifting the dollar against its major counterparts. North American equity futures are setting up for a weaker open, Treasury yields are down, and currencies like the Canadian and Australian dollars are underperforming relative to the Japanese yen and Swiss franc. Financial sector stocks began to weaken last night after First Republic Bank said it had lost more than $100 billion in deposits during the first quarter, forcing it to cut staff and reduce lending activity. Selling continued in the European session when UBS and...