Financial Markets Monthly

Banks are tightening credit standards amid financial sector turmoil. The lending slowdown will weight on U.S. and euro area GDP.

Banking sector turmoil caused significant bond market volatility in March, particularly at the front end of the curve

After a year of aggressive interest rate hikes, major economies continue to show signs of resilience and in some cases acceleration in early-2023.

With inflation slowing but labour markets proving resilient, hopes for a soft landing are growing.

Labour markets holding up but will eventually soften as economies slip into recession

Inflation is slowly starting to retreat from multi-decade highs, helped by falling energy prices and in some cases government relief programs.

We continue to see downside risk to both central banks’ GDP projections for next year.

The Canadian dollar fell below the 76 US cent mark in September for the first time since 2020.

Front-loading has become the motto of central banks looking to quickly remove policy support amid intense inflationary pressure.

Stronger-than-expected inflation continues to force central banks into aggressive action. – RBC Economics

We now see more accelerated tightening cycles and higher terminal rates in all of the economies we track.

May finally brought some relief in what has been a consistent Treasury market selloff this year.