Well, at least one way or another

The key story in the market today is the retreat in bond yields, with 10-year Treasury yields backing off further upon a test of 1.60% yesterday. Yields are down by nearly 6 bps to 1.535% and that is helping to spark a turnaround Tuesday moment in the market.

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The calmer tone is helping to feed into gains in risk assets as the Nasdaq rebounds strongly, rallying by 2% as US futures also rebound further across the board.

Besides that, the dollar is also seeing a bit of a pullback to its recent run higher as EUR/USD climbs towards 1.1900 after having neared a test of its 200-day moving average.

Meanwhile, USD/JPY has slumped from 109.20 to 108.60 levels currently.

Elsewhere, precious metals are also seeking shelter and relief as gold bounces back above $1,700 though it is running into some near-term resistance.

Silver is also up over 2% to $25.75 and looking to hold back above its 100-day moving average, while platinum is up over 3% above $1,170 for the time being.

The ECB is surely breathing a sigh of relief after the latest PEPP data yesterday failed to do much convincing but that doesn't excuse them from possibly needing to send a stronger message at its policy meeting on Thursday.

Another key risk event to watch out for this week will be the US Treasury auctions today (3-year) and tomorrow (10-year). The latter in particular will spark a lot of interest and perhaps provide more clues on how the market will react this week.

As things stand, there is still a slight whiff of uncertainty on whether or not the Fed will push back against the backdrop of rising yields at the FOMC meeting next week.

That might be playing into the push and pull in the bond market this week and could yet keep other asset classes more choppy and reacting to any changes in the meantime.

The entire market is just looking towards bonds for how to move next and it is a weird time to be thinking that ECB PEPP data and Treasury auctions are among the most important aspects of the economic calendar, all things considered.

But that is what it is, since we're all pretty much bond traders now.