After an eventful day in the markets yesterday, U.S. stocks are higher, but off their best levels; gold is also up while crude oil has given up its earlier gains. In FX, the U.S. dollar is mostly weaker but not as much as the euro, while the British pound is up slightly and the Canadian dollar is significantly higher.
It appears that equity markets have taken inspiration from the performance of the financial market at the conclusion of last week, with Asian stocks trading broadly higher and European shares looking positive at the time of writing.
The big theme at the moment is rising bond yields as key central banks attempt to move away from the era of extraordinarily loose monetary policy and zero interest rates. This is due mainly to rising levels of inflation, higher rates of employment and steady growth across many developed economies.
It’s quite interesting how Sterling remains resilient despite being constantly bombarded by political risk and economic woes over the past year. Last week’s awe-inspiring rebound, which was trigged by Bank of England Governor Mark Carney’s hawkish remarks, is a testament to this, as the Britsh pound/U.S. dollar currency pair concluded Q2 above 1.3000.