JASPER’S MARKET SQUAWK 14-07-2023

<h2>Majors Continue Winning Streak on Disinflation Narrative</h2>
<p>US June PPI added to signs of lower price pressure, with stock indices advancing on a weakening dollar. The short end of the yield curve descended, allowing key markets and major pairs to continue their winning streak.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24227 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Market-Squawk-14072023.png" alt="" width="1918" height="912" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Market-Squawk-14072023.png 1918w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Market-Squawk-14072023-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Market-Squawk-14072023-1024×487.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Market-Squawk-14072023-768×365.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Market-Squawk-14072023-1536×730.png 1536w" sizes="(max-width: 1918px) 100vw, 1918px" /><em><strong>Chart: EURUSD</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>US June PPI Falls Below Expectations, Stocks and MajorsRise on Dollar Weakness</li>
<li>ECB Minutes Impact EUR/USD, Support Move Past $1.12 Handle</li>
<li>UK GDP Beats Forecast, Cable Strengthens Despite Worse Industrial Production</li>
<li>Speculation of BOJ&#8217;s YCC Tweak Weakens USD/JPY Below ¥140.00 Handle</li>
<li>OPEC Raises 2023 Demand Forecast, WTI Oil Extends Winning Streak</li>
</ul>
<h2>Poor PPI Sends S&amp;P 500 to 15-Month High</h2>
<p>June PPI figures from the US built on the disinflationary narrative from Wednesday&#8217;s CPI print, with annualised PPI Final Demand at 0.1% compared to 0.4% expected and the first time it fell below 1.0% since the end of 2020. Initial jobless claims were below estimates at 273K compared to 250K expected, helping to support hopes that a hard landing might be avoided. S&amp;P 500 reached a high of 4550, a 15-month high, exposing 4600 while above 4500.</p>
<h2>ECB Minutes Bolster EUR/USD Past $1.12 Handle</h2>
<p>At its last meeting, there was a broad consensus supporting the hike and that core inflation still needs to turn around. The language could have been clearer about what would happen at the July meeting. More members expressed doubts about focusing on core inflation. The minutes reiterated the stance to be data dependent, consider rate hikes on a meeting-by-meeting basis, and that inflation would remain too high for too long. EUR/USD continued its ascend above $1.12, raising 2% since Wednesday and opening up $1.13 unless the 6-day streak provokes some profit-taking.</p>
<h2>Cable 1.15% Higher on Better GDP, Worse Industrial Production</h2>
<p>UK May monthly GDP at -0.1% was better than the -0.3% forecast, leaving the rolling three-month growth flat, compared to the -0.1% forecast. Industrial production was -0.6%, below the -0.4% forecast. Cable rose to $1.3140, leaving support below $1.30 and opening the door to $1.32 and $1.33.</p>
<h2>Rumours of YCC Tweak Support Yen, USDJPY Under ¥140.00</h2>
<p>Press reports suggested that former BOJ Director Hideo Hayakawa said the BOJ would tweak YCC this month, potentially widening the band to 1.0%, given the higher inflation. Japan&#8217;s May industrial production was revised down to -2.2% from the preliminary reading of -1.6%. USD/JPY saw further declines to ¥137.23 early Friday, eyeing potential resistance at ¥139.23</p>
<h2>OPEC Raises Forecast for 2023 Demand, WTI on 3-Day Streak</h2>
<p>In its monthly report, OPEC Raised global oil demand to increase 2.44M bbl/day this year from 2.33M bbl/day increase in the prior forecast, while projections for supply remained the same. The outlook for next year was affirmed. Crude oil received an extra boost from a weaker dollar, hitting a 3-month high of $77.30/bbl, up some 5% this week. Expected resistance lies at $78.75/bbl, while support rest at $75.80/bbl.</p>
<h2>On The Docket</h2>
<ul>
<li>EU Trade Balance</li>
<li>US Trade Balance</li>
<li>Michigan Consumer Sentiment Prel</li>
<li>ECOFIN Meeting</li>
<li>G20 Meeting</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie 0.04% higher, whereas Kiwi 0.04% up</li>
<li>Euro is up by 0.03%, while Cable is 0.12% lower</li>
<li>Yen 0.13% higher, Franc also up, by 0.03%</li>
<li>Canadian dollar 0.03% higher</li>
<li>Gold is down by -0.04%, while Silver is 0.34% higher</li>
<li>Crude and Brent 0.14% and 0.10% higher</li>
<li>Natural gas is up by 0.08%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-14-07-2023-24226/">JASPER&#8217;S MARKET SQUAWK 14-07-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>