Analysts at ANZ explained that market volatility picked up overnight.
“Equities rose after Fed Chair Yellen was viewed as dovish, global rates rallied (with the exception of Canada), the US dollar was mixed and commodities lifted. Yellen’s testimony sparked a US equity rally (S&P 500 up 0.7%), with the market questioning the aggressiveness of the rate outlook.”
“However, north of the boarder, the Bank of Canada hiked rates and had a much more hawkish forward-looking bias. It upgraded its growth outlook and remained positive on the outlook during the press conference. The CAD rallied sharply, and Canadian front end rates rose.”
“However, in the US front end yields fell 2.4bps, and the 10 year yield is back to 2.32% (-3bps). In Europe, curves bull flattened 2-7bps. Oil rose 1.3% and gold climbed 0.3%.”