Calmer Heads Prevail?
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...