Europe's stock markets and the euro staged a mild recovery Wednesday on hopes Italy and the European Union can ease a row that has fuelled fears of another crisis in the eurozone.
"There is a feeling that the government in Rome won't be as radical as initially thought, and that is calming investors' nerves," noted David Madden, market analyst at CMC Markets UK.
While the China-US trade spat simmers, the source of angst among dealers especially in Europe has moved to Rome after Italy's populist government passed a purse-busting budget last week that drew a rebuke from Brussels and warnings to abide by EU rules on public spending.
That prompted Italy's Deputy Prime Minister Matteo Salvini to threaten to seek damages for scaring off investors as the yield on government bonds surged, making it more expensive for Rome to borrow on international markets.
"European stocks are a little higher... after it was reported that the Italian government is planning on lowering the budget deficit to 2% in 2021, and this has taken pressure off the Italian government bonds market," Madden added.
The budget drafted last week raises spending and pushes the public deficit to around 2.4% of gross domestic product.
Asian stock markets meanwhile closed mixed on Wednesday, with Tokyo down 0.7% after hitting a new 27-year high.
Hong Kong eased 0.1% after plunging more than 2% the previous day, while Sydney put on 0.3% and Singapore gained 0.7%.
Shanghai, Seoul and Frankfurt were shut on Wednesday for public holidays.
On currency markets the dollar held above 15 000 Indonesian rupiah after breaking the mark on Tuesday for the first time since 1998 during the Asian financial crisis.
The rupiah has suffered, along with many other emerging market units, as rising US interest rates lead investors to withdraw in search of better returns, while a jump in oil prices has hit Indonesia's current account - leading to concerns about its finances.
In a bid to support the local currency the government is considering measures to attract investment and help exporters.
And India's rupee is sitting near record lows at 73 to the dollar as soaring oil prices put a strain on the country's current account, leading to vast outflows of cash.
Oil is holding at four-year highs but is taking a breather after recent gains, with dealers eyeing a slight increase in US stockpiles.
However, with Iranian supplies due to be taken out of the market, the dollar rising and Venezuela continuing to struggle observers are still predicting $100 a barrel is on the horizon.
On the corporate front on Wednesday, James Bond's favourite carmaker Aston Martin stalled on Wednesday after making a glitzy $5.6bn debut on the London stock market.
Aston Martin shares made a flat start before skidding lower.