USD Rally Loses Momentum As Yields Can't Breach Friday Highs

The early positive USD impetus lost momentum as US yields failed to break above Friday session highs. The BBDXY did break through Friday's highs, getting close to 1224.60, but we now sit back near 1222.90, around +0.10% above NY closing levels.

• Much of the focus was on the early upward impetus in US yields with the 2yr getting to 4.12%, a continuation from Friday NY trade, which was buoyed by the rise in consumer inflation expectations and hawkish Fed. We couldn't through Friday's highs though and now sit back at around 4.105%.
• There was some NZ data but that didn't move market sentiment (PSI and food prices). NZD/USD sits down slightly, last around 0.6195/00, with some support evident ahead of the 0.6180 level, which is a multi-week low.
• AUD/USD hasn't drifted too far away from 0.6700 (last 0.6705/10), with a chunky option expiry at this level potentially a factor.
• USD/JPY got to a high of 134.13, and we sit just below these levels currently, despite the pull back in US yields from earlier highs. Dips in USD/JPY to 133.60/70 were supported.
• ECB's Nagel stated that core inflation should slow before the summer, but stated the central bank still has work to do on the inflation front. EUR/USD sits slightly lower for the session, last around 1.0985.
• Looking ahead, BoE's Cunliffe will speak, along with ECB President Lagarde. Later on in the US, the Empire manufacturing prints, along with the NAHB index. The Richmond Fed's Tom Barkin is also due to speak.