Consolidation mode awaits top-tier data

Global traders reassert the market dynamics after witnessing a volatile start to the key week comprising the US jobs report. The risk-aversion wave during the early Monday faded by the end of the day and helped the Asia-Pacific shares to print mixed performance. The US dollar, however, struggles for clear directions after reversing from a nearly two-decade high the previous day.

China marked another covid-led lockdown and tried to roil the mood, together with the abrupt halt in Russian gas supplies to Europe. However, fears were tamed in hopes of more stimulus, as well as on chatters that the bloc has already secured enough reserves to survive through winter.

US Treasury yields retreat from their monthly peak and Japan’s job numbers also came in firmer, which in turn probed USDJPY bulls at the monthly top. 

That said, prices of gold remained pressured amid hawkish Fed bets but geopolitical tension in Iraq and no sign of a US-Iran oil deal favor the Brent oil to renew its monthly peak.

Elsewhere, BTCUSD and ETHUSD also extend the week-start rebound amid sluggish US dollar and cautious optimism ahead of Ethereum Merge.

Following are the latest moves of the key assets:

• Brent oil prints three-day uptrend around $105, refreshing the monthly top at the latest.
• Gold remains on the back foot at $1,733, down 0.25% intraday by the press time.
• USD Index keeps the previous day’s pullback from 19-year near 108.50.
• FTSE, Eurostoxx and DAX all are positing nearly 1.4 to 1.5% daily gains by the press time.
• Wall Street closed with losses wherein Nasdaq led the bears with 1.02% daily fall.
• BTCUSD rises 0.92% intraday as it regains the $20,500 threshold while ETHUSD buyers flirt with $1,600, up 2.6% at the latest.

Indecision troubles traders

Traders are troubled to digest the central bankers’ aggression and recently improving data while waiting for the key inflation from Germany and Eurozone, as well as the US Nonfarm Payrolls (NFP). It’s worth noting, however, that the latest moves of the US dollar, mostly to the north, approach the key hurdles and hence traders fear profit-booking, which in turn allows the bulls to retreat.

China tries hard to convince markets that they can avoid the economic slowdown but the zero-covid policy and doubts that the stimulus might make the banks in Beijing vulnerable, as well as the real-estate recession, seems to challenge the world’s second-largest economy.

On a different page, US-China tussles are likely to escalate as the Biden administration braces for arms sales to Taiwan.

Talking about the data, Australia’s downbeat Building Permits couldn’t derail AUDUSD as the Aussie government aims for fresh moves to battle the economic slowdown fears.

Above all, fears of higher rates and recession keep traders on the edge even if the risk-off mood cools down of late, which in turn allows the equities and cryptos to pare the latest losses.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq

⬇️ 🔴 Sell: DAX, FTSE 100, gold, BTCUSD

German inflation, US Consumer Confidence to entertain traders

Although Eurozone CPI and the US NFP are this week’s key data, considering the bloc’s energy crisis and Fed Chair Powell’s grim economic outlook, today’s flash readings of German inflation and the US Confederation Board’s Consumer Confidence gauge are important to watch too. Also important will be the Fedspeak and the return of the UK’s traders after an extended weekend.

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