The market is relieved that US yields have stabilized.

As Wall Street closes, NZD/USD trades at 0.6804. As US yields improved, the US dollar fell. This gave rise to risk apatite as well as the commodity complex.

Analysts at ANZ bank stated that "moves in the US bond markets have not been swift and brutal" and while markets do sometimes correct, these moves often turn out just that - corrections and not direction changes.

''Commodity currencies also benefited from the CAD's strong CPI data. CPI data is also available today. ANZ expects a +2.2% QoQ print, which would lead to an increase in annual inflation to 7.4% YoY.

"If the USD is strong, the knee-jerk response in NZD will be higher. However, with a potential extended period of USD strength as Ukraine weights on EUR and BoJ policies weighing on JPY and rising Fed policy (andQT) expectations giving the USD a tailwind to help it, markets may fade the move quickly. The US's long-term bonds are still under threat from QT, and other central banks need to catch up.

In the meantime, data on the day from the Federal Reserve's Monetary Policy tightening plan, its "Beige Book", shows that its economy expanded at a moderate rate from February through April. Businesses were not spared from high inflation or worker shortages.

Tomorrow, Fed Chair Powell will be participating in an IMF panel with ECB President Lagarde about the global economy. This will be the last time we hear the chairman before his post-decision press conference in the afternoon on May 4. Notable is also the fact that the media blackout will take effect at midnight Friday ahead of the FOMC meeting and no Fed speakers will announce the rate decision.