I will continue to hold that in the bond market for the most part. 10-year Treasury yields are holding at the 200-day moving average, which is now expected to be close to 4.37%. The lowest level reached 4.31% yesterday during the delivery process from Asia to Europe.
Daily chart of 10-year US Treasury yields (%)
The fact that bond sellers are still there could arguably keep broader markets at bay as well. The dollar was able to find some support while stocks also fell slightly.
Given the current situation, this creates a more contemplative mood as we look forward to the final day of trading this week.
We've gone from pricing in one rate cut by the Fed to now two. There is an argument that it will be very difficult to reach Level 3 this year, so that may cast a cloud on risk optimism following Wednesday's US CPI data.
From here, it will be a long wait until next week's FOMC meeting minutes. Therefore, traders will be left to their own devices for the most part to figure things out in the meantime.
But if nothing else, keep an eye on the bond market chart as mentioned above.