AUDUSD struggles to cheer strong Aussie employment figures amid sluggish sentiment

Global markets turned dicey, mostly in favor of bears, as traders reassessed Fed rate hike bets after the recently firmer US data. Adding to the risk-off mood were covid fears from China and the policymakers’ comments suggesting further hardships before the economic recovery.

With this, the risk-barometer pair AUDUSD turned red even if Australian employment data flashed upbeat results for October. The currency major EURUSD also remained on the back foot while USDCNY rose the most among the key pairs as China requested banks to report liquidity conditions. Further, Treasury yields recovered and helped the US Dollar to pare the weekly losses. However, mixed comments from Bank of Japan (BOJ) officials challenge USDJPY bulls.

Prices of Gold dropped for the second consecutive day whereas Brent oil remained pressured while bracing for the biggest weekly loss in over a month.

Elsewhere, BTCUSD and ETHUSD also held lower grounds as major exchanges witness aftershocks of FTX collapse.

Following are the latest moves of the key assets:

• Brent oil remains depressed at around $93.50, down for the second consecutive day.
• Gold extends the previous day’s losses to $1,767, down 0.40% intraday at the latest.
• USD Index probes a two-day downtrend around 106.30 as we write.
• Stocks in Europe and the UK are mildly bid even as Wall Street closed in the red.
• BTCUSD and ETHUSD both print losses near $16,600 and $1,200 respectively.

Risk-aversion in place

Firmer prints of the US Retail Sales followed the upbeat Producer Price Index (PPI) and challenged dovish bias over the Fed’s next moves, which in turn allowed Treasury bond yields and the US dollar to recover.

Market pessimism also grew as China continues to report higher coronavirus numbers and asked banks to report liquidity conditions after the bond market rout in the dragon nation.

Australia’s employment number for October questioned the RBA policymakers’ latest comments suggesting easier rate hikes but could not help the AUDUSD. On the other hand, USDJPY remained balanced as BOJ officials showed readiness to curtail easy-money policies after the economic crisis gets over.

On the other hand, the Aussie exchange’s dumping of blockchain plans and Gemini’s heavy outflow exert downside pressure on the leading cryptocurrencies.

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

Risk catalysts are the key

As most of the key data/events are already out, except for the UK’s key fiscal plan announcement, market players are likely to concentrate on the risk flows to determine near-term moves. Among them, headlines surrounding the central banks and economic growth will be crucial to follow. Additionally, weekly US job numbers and monthly activity data could offer extra directives to the traders.

May the trading luck be with you!