Global equities moved higher in early trading on Monday as government bond yields slipped from recent peaks, giving investors a modest lift before a week of major central bank decisions. The move reflected a cautious shift in sentiment after markets had been pressured by higher borrowing costs.

Traders are now watching closely for policy signals from the U.S. Federal Reserve and the European Central Bank. Any changes in language on inflation, growth, or the path of rates could set the tone for stocks, bonds, and currencies heading into the second half of the year.

The easing in yields helped calm fears that financing conditions might tighten further in the near term. Even so, investors remain wary of volatility, with many positioning defensively until the two central banks clarify whether rates will stay elevated for longer or begin to ease.

The market’s modest advance suggests investors are willing to take on a bit more risk, but only selectively. With policy uncertainty still high, upcoming central bank meetings are likely to determine whether the rebound in equities has room to continue.

Fed meeting

Stocks Rise as Bond Yields Ease Before Fed, ECB Meetings