The dollar index was flat after giving up earlier gains, as the post-payrolls recovery in Treasury yields faltered after the day's 10-year auction.

Markets are also looking ahead to next week's U.S. CPI and PPI readings, which are forecast up a puny 0.1% month-on-month, while WTI has tumbled nearly 18% from October's highs.

Dollar support on anxiety regarding rising Treasury supply lifting yields dimmed further after Tuesday and Wednesday's 3-year and 10-year auction were taken down without any major hiccups.

Treasury yields from 2- to 10-year tenors remain far closer to last week's post-Fed and weak unemployment and ISM report lows at 4.807% and 4.484% than last week's 5.092% and 4.935% respective highs.

The market continues pricing in almost no chance of another Fed hike, with cuts beginning by mid-year.
The dovish outlook for the Fed and the dollar would likely be reinforced by de minimis October CPI and PPI increases.

EUR/USD shed early losses and got back above flat amid the broader dollar pullback and rising 2-year bund-Treasury yield spreads, with dip-buyers seen again above key supports that had been resistance until Friday.

A fall in euro zone retail sales extended the list of poor data from the region, but there was some ECB pushback against easing expectations.

USD/JPY rose 0.3%, but ran into a thicket of technical and options resistance by 151.
The uptrend also faces 2023/22 peaks at 151.74/94 and the risk of the MoF wading in with intervention threats or actual USD/JPY sales.

On balance, the unexpected dive in energy prices, particularly within the context of the Israel-Hamas conflict, is good news for major importers such as Japan and the euro zone versus exporters such as the U.S.

Sterling was flat.
The market sees the BoE cutting rates mid-2024, though UK inflation remains at a fairly febrile 6.7%, suggesting deeply negative real gilts yields.

Aussie and CAD fell 0.4% and 0.3%, while the offshore yuan lost 0.12%, the latter as China's property sector drama persists and U.S. lawmakers want to hike tariffs on Chinese-made vehicles.

Thursday brings just jobless claims, followed by Michigan November sentiment on Friday.

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