JASPER’S MARKET SQUAWK 28-11-2023

<h2>Greenback Descents to 4-Month Low</h2>
<p>Investors experienced a minor setback on Cyber Monday on the heels of a soft bond auction and increasing bets that the Fed is done hiking. The 10-year dropped to 4.39% after disappointing new home sales data confirmed weaker demand, sending the index to a fresh 4-month low.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-27333 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-14.png" alt="" width="1913" height="915" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-14.png 1913w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-14-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-14-1024×490.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-14-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-14-1536×735.png 1536w" sizes="(max-width: 1913px) 100vw, 1913px" /></p>
<p><strong>Chart: USDJPY</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Gold to Half-Year Peak Amid Broadly Weaker Dollar, Poor Data</li>
<li>ECB’s Inflation Struggle Continues Regardless of Positive German Sentiment</li>
<li>BOE’s Bailey Predicts Tough Path to Inflation Target, Pound to 3-Month High</li>
<li>Japanese Wages Surge in Support of Policy Exit, But Kuroda Still Doubtful</li>
<li>China’s New REITs Breathe Life into Property Market, Aussie Boosted</li>
</ul>
<h2>Gold Spikes to 6-Month High Amid Weaker Dollar</h2>
<p>The 2- and 5-year bond auctions showed poor demand on Monday at 4.887% vs 5.055% and 4.42% vs 4.599%, respectively, weighing on the dollar index. Coupled with speculations around the Fed’s hiking cycle and new home sales data falling to 0.679M from 0.723M expected in October, equities also struggled despite the Cyber Monday sales exceeding expectations. Gold touched a six-month high of $2018 per ounce on the back of the minor risk aversion, increasing the allure of the non-yielding bullion to perhaps $2030 next.</p>
<h2>ECB’s Inflation Battle Likely to Continue for “Long”</h2>
<p>ECB President Christine Lagarde insisted that the bank continues to grapple with inflation, with the fight showing progress, but it is far from over. Lagarde maintained the “long” narrative seen in recent guidance. This comes as Germany’s cabinet is expected to agree on a supplementary budget in January, suggesting new fiscal measures to add funds to the federal budget. The eurodollar ended Monday a tad higher but failed to enter new territories while leaving behind what seems like an exhaustion gap. $1.10 and 1.0909 remain must-watch levels.</p>
<h2>BOE’s Bailey Insists “Too Soon” For Rate Cuts</h2>
<p>BOE’s Governor Andrew Bailey mentioned that bringing inflation back to the 2% target will require considerable effort, reflecting central banks’ global struggle to tame rising prices. The central banker acknowledged the damage from higher rates but insisted that it is simply “too soon” to consider rate cuts. The British pound was seen rising to fresh 3-month highs at $1.2645, where it appears to be facing resistance, making $1.26 all more critical. $1.2673 is expected resistance if the move continues.</p>
<h2>Japanese Wages Towards the Right Direction</h2>
<p>A government poll showed that Japanese companies had raised monthly regular pay by a record amount this year, with monthly pay up 3.2%, a positive sign for BOJ’s exit strategy. However, the BOJ’s Ueds Kuorda continued to express uncertainty about hitting the bank’s 2% inflation target sustainably. The Japanese yen has lost nearly 1% since the weekly open when adding today’s drop below 148 and might experience increased volatility around the 100-day SMA.</p>
<h2>China’s REITs Approval Boosts Property Market and Aussie</h2>
<p>In a move to invigorate the property market, China has approved the first batch of consumption-related REITs. The new REITs are expected to channel investor funds to property owners, allowing developers to exit their projects amidst a backdrop of declining sales and default risks. Aussie appears bid on the positive property/material news coming out from China, as it finally reclaimed the 66-cent barrier on Monday after a 3-day winning streak. It just hit a 3-month high of 0.6632 early Tuesday, eying mid-50s next.</p>
<h2>On The Docket</h2>
<ul>
<li>GfK Consumer Confidence</li>
<li>S&amp;P/Case-Shiller Home Price</li>
<li>CB Consumer Confidence</li>
<li>Fed Goolsbee Speech</li>
<li>Few Waller Speech</li>
<li>Fed Bowman Speech</li>
<li>ECB President Lagarde Speechg</li>
<li>BOE Haskel Speech</li>
<li>Fed Barr Speech</li>
<li>ECB Oane Speech</li>
<li>API Crude Oil Stock Change</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie 0.22% higher, Kiwi at 0.09%</li>
<li>Euro 0.05% down while Pound 0.01% up</li>
<li>Loonie up 0.15%, Frank unchanged</li>
<li>Japanese yen 0.33% higher</li>
<li>Gold 0.2% up, Silver barely up at 0.06%</li>
<li>Crude and Brent up by 0.1% and 0.07%</li>
<li>Natural gas 0.81% in the green zone</li>
</ul>
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<p>The post <a href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-28-11-2023-27332/">JASPER’S MARKET SQUAWK 28-11-2023</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>