Technically a bullish yield scenario is building up. The implications are interesting for Stocks and FX both.
- Selling US bonds -> weakening effect on USD
- Yields climbing up -> risk-on sentiment, equities up
- Yields climbing up -> markets reevaluate Fed message and start to reprice rate hike -> USD supportive
Contradictory messages are visible from the bond markets, the reason for yields moving up will be crucial (FED pricing, or bond selloff)
Action:
Correlation between FX and Bond market is dubious, check eco data instead for clues. Weaker US data -> more dovish Fed -> weaker DXY