US 10 year yields

The S&P 500 has extended its gain to 2.2%. Even with that, this should be the sixth consecutive week of decline. That only underscores how far this bounce could go.

What could limit it though is the bond market. US 10-year yields hit 3.20% after the CPI report before falling all the way to 2.80% at the low yesterday. That reflected a retracement and a flight to safety.

But the lower yields aren't sticking around. We're up 11 bps to 2.92%.

What's the limit before high yields bleed back into risk aversion in stocks?

That push-and-pull has led to the steady deterioration in stocks.

In FX, there's scope for an ongoing retracement in the US dollar. It's most-evident in commodity currencies right now but cable has also proven to be highly risk sensitive so that's a spot to watch as well.