Ultimately,  it will only be a turn in the official data that will prompt a more lasting sustainable turn lower in US yields. Hence, it would be premature to conclude that the US Dollar is now set to weaken on a sustained basis.

Still, positioning does appear to have been quite short and Monday’s bounce in EUR/USD took us to a high not seen since 20th September (intra-day high 1.0737) and positioning given the surprise bounce on Monday could see the move to the upside extended further.