Risk appetite improves as bond market turmoil eases globally

Global markets attempted a rebound Wednesday as fiscal concerns that triggered recent bond market turmoil showed signs of easing. Risk-sensitive currencies gained ground against safe havens, with AUD/USD rising 0.4% to 0.6580 and NZD/USD advancing 0.35% to 0.5920. The improved sentiment followed a stabilization in government bond yields after sharp selloffs earlier in the week driven by fiscal sustainability worries. EUR/USD recovered to 1.0845, while USD/JPY held steady near 149.50 as the yen's safe-haven appeal diminished. Market participants remain cautious despite the rebound, monitoring bond yield movements closely. The VIX index declined 8% to 16.2, suggesting reduced market stress. However, underlying fiscal concerns persist, keeping traders alert for potential volatility resurgence. Support for risk currencies depends on continued bond market stability through the week's remaining sessions.