USD: Markets stabilise after shake-out as bonds rebound – BBH

After yesterday's market shake-out, the USD market is stabilizing again. The rebound in Japanese government bonds is lifting other sovereign bonds, while the drop in stocks and the dollar has paused. This adjustment suggests a potential convergence of risk-off movements, but the market volatility remains high, especially with close attention needed on stock market trends. The recovery in the bond market may indicate a broader improvement in overall risk appetite among investors. It may reflect the belief that the unstable factors priced into the market are temporary. Since the dollar is affected by monetary policy and investor risk preferences, careful monitoring of upcoming trends is essential. While a rebound of the dollar could be anticipated if stability returns to the market, specific support or resistance levels are not indicated. Therefore, watching future developments closely is vital.