Market Brief, North America

The British pound is back on the defensive, weakening as political chaos and conflicting monetary policy messages sap demand for sterling-denominated assets. Prime Minister Liz Truss—now in power for all of 44 days—is under pressure to resign after firing one of her most senior ministers, receiving resignations from two more, and threatening others with disciplinary action if they failed to vote on party lines. A number of Ministers of Parliament have submitted no confidence letters, and the chair of the 1922 Committee—which represents the views of party leaders—is reportedly meeting with Truss to discuss ways to move forward. The Bank...

Volatility expectations are inching back up, Treasury yields are climbing, and the dollar is firming as central bank officials keep making hawkish noises. Rate differentials tilted further in the greenback’s favour and terminal expectations moved higher during yesterday’s session after Minneapolis Fed president Neel Kashkari said rate hikes wouldn’t pause until core inflation subsides, and said “I don’t see why I would advocate stopping at 4.5 percent or 4.75 percent or something like that”. The pound is down more than half a percent after an inflation report showed prices rising 10.1 percent in the year to September, higher than the...