AUD/USD is tracking back towards the highs of the day as US equities near the best levels of the day.
This pair (and NZD) is leading the rally against the US dollar for the second day and I think that's telling. AUD is often driven by China sentiment and today, Chinese President Xi Jinping is in San Francisco and meeting with US President Biden. The meetings represent a dialing-down of trade tensions between the rivals.
Looking at China ADRs, the KWEB China tech ETF is up 4.7% today and at a session high and challenging the October top.
Chinese data overnight was also decent with industrial output and retail sales both slightly above estimates.
While I think Fed expectations have gone too far with pricing in an 80% chance of a May 1 cut, there's plenty of room for China valuations to recover if there's a crest in trade tensions.
