The initial reaction to the US CPI data on Wednesday was rather straightforward. The dollar fell and risk trades surged, as bond yields sank after a slightly softer report in general. But by the end of the day, yields pared declines and have now moved higher on the week with 10-year yields even pushing past its 100-day moving average of 2.88% currently.

The move since the day before was arguably what is giving broader markets some food for thought before the weekend and although equities are higher today and the dollar is trading more mixed, it may be tough to ignore a further jump in yields - especially if 10-year yields start to look towards 3% again.

In turn, I would expect that to bolster dollar sentiment (USD/JPY in particular) and weigh more heavily on stocks (tech stocks mostly). As much as we all love simplicity when it comes to deciphering market narratives, this definitely isn't the case when reading the reaction in the different asset classes in trading this week.