The dollar is softer across the board as it is giving back some of the gains worked out as of late. That said, even with a 1% jump in cable it is still hardly felt with price hovering just above 1.0800 on the day. Elsewhere, the dollar's position are also solidified with USD/JPY down 0.3% but still at around 144.30 and keeping close to running up against the 145.00 level - where Japanese authorities intervened for the first time since 1998 last week.

The euro also remains in a rough spot, just above 0.9600 against the dollar today as traders are starting to get used to the view of the currency pair holding below parity. Against the commodity currencies, the greenback is losing some ground but in the context of the moves over the past week, tis but a scratch.

One day doesn't make a trend but with month-end trading approaching, perhaps there is room for a bit of a correction in the dollar run and that might also see broader market sentiment hold up in the coming days.

Looking at equities, US futures are faring much better after yesterday's drop with S&P 500 futures up 42 points, or 1.1%, at the moment. But perhaps the biggest nod for broader markets is that bonds are able to put a stop to the rout for the time being.


10-year gilt yields are down 11 bps to 4.12% while 10-year Treasury yields are down 4.5 bps to 3.835% currently and that in my view is what is allowing markets to breathe a sigh of relief today. But that is not to say that things are getting better or the dark clouds are finally clearing up.

We are at a point where volatility is extremely heightened and there are serious financial dislocations that may be (or already are) taking place. The global bond market itself has lots over 1/5 of its value this year alone and a big part of that is staying long in the dollar is the only game in town in trading this year.

When even the bond market is acting up wildly, that's a major red flag to risk assets in particular and reason enough for the reaction we are seeing in broader markets this year - especially in the last few weeks.

These charts from @biancoresearch make for a damning case in point in the bond market at this point relative to historical times: