Global markets saw a positive turn as stocks across the Asia-Pacific region mirrored gains on Wall Street, with investor sentiment buoyed by a more favorable yield environment and a lack of escalation in the ongoing trade tensions. This rally follows the backdrop of softening yields in the US, easing concerns around potential tightening pressures.

US Treasury Secretary Bessent recently mentioned that President Trump is aiming for lower 10-year Treasury yields, though clarifying that there are no calls for the Federal Reserve to cut rates at this time. This statement added to the supportive sentiment, as the market digested the expectation that the Fed may refrain from further tightening.

Over in Europe, the outlook remains positive, with Euro Stoxx 50 futures up 0.5% as markets open, signaling a steady continuation of upward momentum after a modest 0.1% gain in the previous session. European traders seem encouraged by the calm in global trade and the ongoing moderation in yields.

The US dollar index (DXY) has dipped below the 108 mark, with the antipodean currencies struggling to keep pace. Meanwhile, EUR/USD has once again returned to the 1.04 handle, signaling some stabilization in the Eurozone. The Japanese yen has found support, buoyed by hawkish comments from the Bank of Japan, contributing to the cautious optimism in the currency markets.

As we look ahead, a number of economic reports and central bank decisions will be in focus in the coming days. Key releases include Swedish CPI, Eurozone Retail Sales, US Jobless Claims, and the policy announcements from the Bank of England (BoE), Czech National Bank (CNB), and Banxico. The BoE’s quarterly monetary policy review and Governor Andrew Bailey’s speech are particularly noteworthy, while speeches from Fed officials, including Waller, Daly, and Jefferson, are likely to add to market speculation about future rate moves. Additionally, markets will watch the Bank of Canada’s (BoC) Macklem as he discusses the bank’s outlook.

Earnings season is also in full swing, with a range of major companies reporting this week. Among the highlights are ING, ArcelorMittal, Oersted, Carlsberg, Maersk, Compass, AstraZeneca, Société Generale, Vinci, L’Oréal, Eli Lilly, Roblox, Amazon, and Affirm. These reports are expected to provide further insights into the health of global businesses and the broader economy.

Overall, global market sentiment is cautiously optimistic, supported by a more favorable yield environment and ongoing policy responses aimed at stabilizing the economy. However, the week ahead will be crucial, with several key economic releases and earnings reports shaping the market outlook.