Market Brief, North America

With tensions continuing to ease across the global banking sector, high-risk currencies are edging higher and the dollar is retreating from its recent highs. Trading volumes in bond markets are beginning to subside – but with investors reducing bets on a turmoil-induced pivot in central bank policy, rates are moving upward. The US two-year is yielding more than 4 percent once again, and equivalent benchmarks in the euro area, United Kingdom, and Canada are climbing off levels reached last week. The euro continues to march higher, with rising bond yields – supported by still-elevated inflation expectations – helping to push the...

A sense of cautious optimism is returning to financial markets this morning as investors bet contagion risks at regional banks in Europe and the United States have been largely contained. All of the major currency pairs are trading within relatively tight ranges, Treasury yields are inching back from last week’s selloff, and equity futures are setting up for a stronger open. Oil prices are rising, gold is falling, and the Canadian dollar – again functioning more like a risk proxy than a national currency unit – is climbing against the greenback. Signs of stability are returning. European bank shares climbed through the...