The US dollar is on the backfoot in the past hour and it's being driven by the bond market. US 10-year yields are down 4.6 bps to a session low at 3.42%.
The decline in yields is part of a broader deterioration in the risk tone. S&P 500 futures are down 35 points to 3998, or 0.9%. The decline came after poor guidance from Microsoft in the conference call, turning a big gain into a 3% decline.
The market is expressing more worry about a harder landing in the US economy and that's coming with increasing confidence that the Fed won't hike above 5%.
USD/JPY touched a session low at 129.57, which is the lowest since early on Monday.
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