The US dollar is under pressure following a soft ISM manufacturing report.
The main catalyst is the bond market as yields fall 7-10 bps across the curve. US 10-year yields have backed further away from 5%.
The Treasury announced new auction sizes for bonds today and 10-year sizes weren't as large as feared. That's triggered something of a FOMO rally in bonds, driving yields sharply lower. Adding to it is a soft ISM manufacturing report and lower-than-expected ADP employment data.
The equity market is cheering lower yields with the S&P 500 up 0.7% and Nasdaq up 0.9%. That's adding to a bid in risk assets and driving the commodity currencies higher.
Furthermore, USD/JPY longs are getting squeezed and taking some profits, with the Fed decision later also a risk.
