Inflation back on the menu in European trading today

<p>The dollar remains in an imperial spot as the bond rout continues, once again picking up in US trading yesterday. 10-year yields in the US are up to 4.60% as the selling in bonds are also impacting broader market sentiment in general. Stocks were under pressure yesterday before some late buying helped out the Nasdaq – which might be related to month-end, quarter-end flows.</p><p>It's all about what is happening with bonds right now and as long as yields continue to soar, the dollar will continue to benefit. EUR/USD is on the verge of a drop below 1.0500 while USD/JPY is threatening the 150.00 mark despite intervention fears. Meanwhile, gold has even tripped below its August lows to its lowest levels since March.</p><p>The only standout performer against the dollar has been oil with WTI crude securing yet another strong breakout day as the bulls eye $95 now. Price is up another 1% today to $94.60 currently, its highest levels since August last year as $100 is just on the horizon again.</p><p>Coming up in European trading, we will be getting Spain and Germany inflation reports. That could factor in slightly to what is happening in bonds but even with softer figures, I see any drop in yields to be relatively mild and temporary as it is tough to challenge the ongoing momentum.</p><p>Either way, this isn't going to be one to change the ECB outlook whatsoever. Rate hikes are officially over.</p><p>As such, the pressure might stay on the euro but for the dollar, it is not likely to be dethroned any time soon until at least the bond selling stops. And that might not come until we get to the US jobs report next week.</p><p>0700 GMT – Spain September preliminary CPI figures0900 GMT – Eurozone September final consumer confidence0900 GMT – Eurozone September economic, industrial, services confidence1200 GMT – Germany September preliminary CPI figures</p><p>That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.</p>

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