Global markets recovering as investors are optimistic that early concerns on Brexit were exaggerated

A week after the U.K.’s vote to leave the European Union sent global markets reeling, corporate bond investors are optimistic those early concerns were exaggerated.

While a gauge of volatility is easing, European shares have had a wild ride in the run-up to and in the aftermath of the Brexit vote, with trading volumes reaching records. After rising as much as 8.1 percent from a three-month low on June 14 through the day of the referendum, the Stoxx 600 tumbled 11 percent over the following two sessions. Even after the subsequent rally, the gauge posted a 5.1 percent decline in June, its worst monthly drop since January. For the quarter, it’s down 2.3 percent.

Pledges from central banks have boosted investors’ spirits. The Bank of England said it may cut interest rates within months, the odds of the Federal Reserve raising borrowing costs this year have dropped and the European Central Bank is considering loosening the rules of its bond purchases to ensure enough debt is available to buy.

Emerging-market stocks erased their Brexitinduced losses this week and currencies rallied with oil as sentiment improved on signs central banks stand ready to add stimulus. The MSCI Emerging Markets Index of shares climbed 3.8 percent for the week, its biggest gain in four months.

Commodity investors aren’t letting the shock of Brexit spoil their best three months since 2010. While the U.K.’s vote to leave the European Union has whipsawed markets, raw materials have still outperformed stocks, bonds and the dollar in the second quarter with a return of 13 percent.

U.S. investors rushed back into equities this week following a two-day rout that wiped out more than $1 trillion in value, lured by signals that policy makers stand ready to act if the U.K.’s decision to leave the EU threatens global expansion.