JASPER’S MARKET SQUAWK 03-08-2023

<h2>Flight to Safety Defining Markets</h2>
<p>Global equities fell after Fitch’s downgrade of US sovereign rating. Yields climbed in the wake of unexpectedly strong ADP, with the benchmark 10-year yield hitting highs not seen since November.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24757 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-65-1.png" alt="" width="1770" height="850" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-65-1.png 1770w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-65-1-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-65-1-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-65-1-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-65-1-1536×738.png 1536w" sizes="(max-width: 1770px) 100vw, 1770px" /><em><strong>Chart: EURUSD</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Fitch’s Downgrade of US Sovereign Rating Impacts Global Equities</li>
<li>ADP Report Boosts Dollar, Putting Pressure on EUR/USD</li>
<li>WTI Crude Tumbles Despite EIA Confirming API Draw</li>
<li>BOJ’s Unplanned Bond Purchase Pushes USD/JPY Towards June Top</li>
<li>Soft Data in Australia Sends AUD Under 66-cent Barrier</li>
</ul>
<h2>Upbeat ADP Adds to Dollar Gains, Pressure On EUR/USD</h2>
<p>The ADP reported 324K jobs were added last month, compared to just 190K expected, seeing continued slowing of pay growth without job losses. Strong rhetoric out of United Auto Workers amidst contentious labor negotiations with US OEMs weighed on risk sentiment and pushed up the yield curve. As a result, EUR/USD declined over 0.40%, with traders targeting $1.09 and $1.0880 next. Resistance is expected at $1.0965.</p>
<h2>WTI Tumbles 2.90% Despite EIA Confirming API Draw</h2>
<p>The DOE reported that inventories saw a 17M bbl drawdown last week, compared to the -1.5M estimated, confirming the API report of the day before. Crude prices tumbled, having already anticipated the figure from yesterday’s data and suffering from a stronger dollar. The commodity lost the $80/bbl handle again, opening up $77.30/bbl a day ahead of OPEC’s meeting on Friday. Reclaiming the round resistance might see prices revisit the regional top at $82.50/bbl.</p>
<h2>BOJ Buys Bonds Unplanned, USD/JPY Closer to June Top</h2>
<p>The BOJ surprised the market for a second time this week with an announcement to buy an additional ¥400B in 3-10 JGBs as it moves to defend the new upper bound of YCC. Japan’s Chief Cabinet Secretary Hirokazu Matsuno said the government was closely coordinating with the BOJ on FX and watching the moves carefully. USD/JPY reversed yesterday’s gains intradaily, but recoiled back to the top by the close, exposing 144.20 and 76 in an attempt at retaking June’s high. 142.28 remains strong support bulls need defending.</p>
<h2>Soft Data in Australia Sends Aussie Under 66-cent Barrier</h2>
<p>Q2 Australian retail sales volume fell 0.5%, as expected, leading to a -1.4% drop for the year. The figure feeds into the GDP figure to be published next month, suggesting the economy could grow slower than forecast. Exports also slowed in June, according to overnight data, down 2.0%, to accumulate -10.8% in twelve months. Consumer imports fell 14.5%, helping the trade surplus widen despite lower exports. AUD/USD losing $0.66 could bring the pair closer to Jue’s bottom at $0.6458, with interim support at $0.65. Increased bullish bets might see prices tick back towards $0.66, provided $0.6574 gives way to bulls.</p>
<h2>On The Docket</h2>
<ul>
<li>EA HCOB Services PMI</li>
<li>S&amp;P Global/CIPS Services PMI</li>
<li>BOE Interest Rate Decision</li>
<li>Initial Jobs Claims</li>
<li>ISM Services PMI</li>
<li>Factory Orders</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.08% and 0.13% down</li>
<li>Euro 0.09% lower, pound by -0.07%</li>
<li>Yen is down by 0.29%, Swissy 0.13% lower</li>
<li>Loonie is down by 0.03%</li>
<li>Gold and Silver 0.25% and 0.49% lower</li>
<li>Crude and brent 0.19% higher each</li>
<li>Natural gas is up by 0.20%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-03-08-2023-24750/">JASPER’S MARKET SQUAWK 03-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>