AUDUSD recovers from multi-day low as China-linked fears ebb

Global markets stabilize after risk aversion as traders brace for Thursday's inflation data. That said, mixed China CPI and PPI details joined the softer US ban on China tech investment to increase the cautious optimism.

The consolidation move joins downbeat yields to stop the US Dollar bulls while RBNZ’s firmer inflation expectations for Q3 allowed the NZDUSD pair to lead the G10 currencies versus the Greenback, especially amid positive news about China. With this, AUDUSD traces the Kiwi pair and manages to rebound from a two-month low whereas other major currencies also lick their wounds amid lackluster markets.

It should be noted that the equities in the Asia-Pacific zone edge lower while the US stock futures print mild gains after refreshing the monthly low the previous day. That said, shares from Europe and the UK also gain by the press time.

That said, WTI crude oil remains firmer but stays within the weekly trading range surrounding the April highs whereas Gold recovers from the lowest level in a month despite lacking upside momentum of late.

Elsewhere, BTCUSD and ETHUSD print mild gains even as the softer US Dollar battles with the looming bank woes and fears of delay in Bitcoin ETF, as well as more regulatory woes.

Following are the latest moves of the key assets:

• Brent oil defends the previous day’s rebound from the weekly low while printing mild gains around $86.50.
• Gold price recovers from the lowest level in a month to around $1,930, up 0.22% intraday at the latest.
• USD Index snaps two-day winning streak near 102.35, down 0.20% on the day as we write.
• Wall Street benchmarks closed with losses but the stocks in the Asia-Pacific zone edged lower. That said, equities in Europe and UK trade with notable gains by the press time.
• BTCUSD and ETHUSD print minor gains to around $29,800 and $1,860 of late.

Risk aversion eases but traders are not out of the woods

Although the aforementioned catalysts challenge the previous day’s pessimism, the risk-takers are far from sight as traders remain cautious ahead of this week’s top-tier data.

Also, looming concerns about another round of bond payment default in China and the Sino-American tension join the challenges for the global banks to weigh on the sentiment.

It should be noted that the risk of witnessing recession in the UK and China also keeps the market players on their toes.

With this, the US Dollar bulls remain hopeful despite retreating of late whereas the riskier assets like AUDUSD, equities and Antipodeans are on the dicey floor. It should be noted that Gold’s downside break of the key support keeps the bears hopeful despite the latest corrective bounce.

• Strong buy: USDCAD
• Strong sell: ETHUSD, GBPUSD, Gold
• Buy: USD Index, Nasdaq, USDJPY
• Sell: DAX, FTSE 100, BTCUSD, AUDUSD, EURUSD

Qualitative factors are important ahead of inflation clues

Having witnessed the market’s consolidation during early Wednesday, a light calendar in Europe and the US may challenge the momentum traders. Even so, fears about China's bond market, global economic recovery and fears for the major banks, not to forget concerns for higher rates, may keep probing the optimists.

May the trading luck be with you!