US dollar trims post-NFP gains ahead of US inflation

The market begins the key week comprising the US CPI with a slightly optimistic tone as Taiwan-linked tension eased amid a sluggish day. The US dollar also pares post-NFP gains as the Treasury yields retreat. With this, commodities and Antipodeans consolidate recent losses as weekend releases of China trade numbers offer additional help.

It should be noted, however, that the stock futures in the US and Europe remain sluggish and challenge cautious optimism.

That said, RBNZ inflation expectations couldn’t derail the NZDUSD rebound while USDJPY pares recent gains tracing the bond coupons. 

Gold rebounds from short-term support and oil prices also extend the late Friday’s corrective pullback from a six-month low.

BTCUSD and ETHUSD escalate recent recovery moves as whales tighten grips amid lower prices.

Following are the latest moves of the key assets:

• Brent oil regains $98.00 while bouncing off six-month low.
• Gold reverses pullback from 50-DMA, up 0.05% near $1,770 at the latest.
• USD Index pares recent gains around 106.40-35, down 0.20% intraday.
• FTSE 100 prints mild gains but Eurostoxx and DAX remain indecisive by the press time.
• Wall Street marked losses on Friday led by Nasdaq’s 0.50% daily fall.
• BTCUSD and ETHUSD gain 3.0% and 2.0% intraday by the press time as bulls keep reins near $23,850 and $1,735.

China fails to threaten the markets

Although Beijing continues to warn the US and Taiwan, a lack of major reaction from Washington seems to keep the traders hopeful. Also underpinning the corrective pullback is the recent weakness in US bond yields and the market’s positioning ahead of this week’s US Consumer Price Index (CPI).

RBNZ Inflation Expectations eased for Q3 and helped the NZDUSD to remain firmer while an increase in Japan's trade deficit and strong China export-import data offered additional help for the commodities and Antipodeans.

It should be noted that the jump in the interest rate futures suggesting a 0.75% Fed rate hike in September joins hawkish Fedspeak to keep the optimists at bay, which in turn suggests the US dollar’s further recovery. As a result, the latest rebound in the prices of gold and crude oil appears tepid.

Elsewhere, big players in the cryptocurrency markets are taking benefit of lower BTCUSD and ETHUSD prices to gradually increase their positions, as per the latest glass node data.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETHUSD

⬆️ 🟢 Buy: USD Index, USDCAD, Nasdaq

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

Noting major on the cards before US CPI

Risk catalysts could entertain market players ahead of the key US inflation data that will be crucial for the market. Also important will be the Fedspeak and second-tier economics from the Asia-Pacific zone.

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