AUDUSD 15 mins

The Australian dollar is challenging the June 22 high in a pop after the UMich consumer sentiment survey showed that inflation expectations weren't as high as the Fed thought.

That's led to broad selling in the US dollar and a jump in US stocks.

The odds of a 50 bps hike in July rather than 75 bps have jumped but are bouncing around as the market struggles to decide what will come next. The odds sit at 22% from a high of 29% a short time ago.

What's more important is the terminal rate that the Fed sees. It's in the 3.50-3.75% range at the moment but that's actually up from earlier.

There's a reflexivity ongoing in the market as well. The better mood has boosted oil prices but that's feeding back into bonds yields (higher) and could temper stocks.