Yields lower awaiting US CPI data

<p>10-year yields in the US are down over 4 bps to 4.193% currently, keeping with the downtrend still since the drop from 5% at the end of October. The lower yields today is also partly weighing on the dollar at the moment, with USD/JPY down 0.6% to 145.30 and EUR/USD now up by 0.4% to 1.0803 on the session.</p><p>It's still all to play for with the US CPI data to come later and then the FOMC meeting statement/decision tomorrow. And then after, we also still have the BOE and ECB to consider for the remainder of the week.</p><p>There's going to be plenty of potential twists and turns but if you read into the bond market action, that should also make it easier to decipher how broader markets are going to react in response.</p><p>The hot topic on everyone's lips right now is rate cuts and if traders can stick to the recent pricing and narrative, it should keep the pressure on the dollar while helping stocks and bonds to rally heading into Christmas. But if central banks do push back this week, there is scope for a retracement – especially after the aggressive pricing in the past two weeks or so.</p>

This article was written by Justin Low at www.forexlive.com.