Euro rebounds as the CPI move runs out of gas

The US dollar jumped following the hot CPI report but the move hasn't extended following the initial burst. There is some retracement ongoing across the board but the move in the euro is particularly strong. It's now recovered more than half of the loss.

I wonder if the move in FX in general isn't signaling that inflation isn't going to be a big trading theme and that these moves are a one-off. Yields are up 10 bps but haven't extended either and the main trading themes remain AI, tariffs and tax cuts in the US.

Aside from that, the particular euro strength is notable. Eurozone economic data remains in the dumpster but stock markets there have been recovering despite a fresh energy crisis. Europe is supremely hated by just above everyone and when we see price action like today it looks like there is no one left to sell.