JASPER’S MARKET SQUAWK 22-08-2023

<h2>Slow News Day Lets Markets Drift Higher</h2>
<p>Equities and yields drifted higher bolstered by a narrative of a soft landing in the US, with global indices trading mixed. The benchmark 10-year yield moved back over 4.3% to another 15-year high. Big tech names drifted higher ahead of Nvidia’s earnings on AI anticipation, supporting the Nasdaq.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25139 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/GRAPH-2208-1.png" alt="" width="1752" height="839" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/GRAPH-2208-1.png 1752w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/GRAPH-2208-1-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/GRAPH-2208-1-1024×490.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/GRAPH-2208-1-768×368.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/GRAPH-2208-1-1536×736.png 1536w" sizes="(max-width: 1752px) 100vw, 1752px" /></p>
<p><strong>Chart: EURUSD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Gold Rises as PBOC Disappoints with Rate Decision</li>
<li>Italy Hopes EU Will Ease Debt Requirements, ECB Hike Expectations Remain</li>
<li>BOJ Governor Meets with PM to Discuss Policy, No Talk of FX Volatility</li>
<li>Crude Prices Fluctuate as Storms Stir Up Concerns, Ends Lower</li>
<li>Natural Gas Spikes as Australian Workers Threaten Strike at LNG Facility</li>
</ul>
<h2>Gold Higher After China Concerns Remain Sticky</h2>
<p>The PBOC disappointed markets again by not cutting rates as much as expected. The central bank cut the 1-year loan prime rate by 10 bps which was less than expected and did not cut the 5-year loan prime rate as the market had anticipated. Structural headwinds and underwhelming policy responses keep risk appetite low and support gold. The yellow metal made a run for its next major resistance around the $1,900/oz handle, leaving behind support at the double bottom seen just above $1,885/oz.</p>
<h2>Italy Hopes EU Will Scrap Debt Requirements</h2>
<p>Italian Economy Minister Giancarlo Giorgetti said he hoped that the EU Stability Agreement (EUSA) did not return in 2024, potentially opening another disagreement between the “north” and “south”. The EU suspended its requirement that countries keep deficits below 3% for several years in the context of the pandemic, and bringing the EUSA back into force next year could curtail government spending in the periphery and weigh on the shared economy. However, expectations for another rate hike from the ECB remain intact. The Eurodollar continued to move away from its last support just below $1.0850, signalling the end of a 9-day losing streak and potentially looking for resistance at the round $1.0950 handle if the upward momentum can be maintained.</p>
<h2>BOJ Governor and PM Meet on Policy</h2>
<p>Reportedly, the Governor of the BOJ, Kazuo Ueda, met with Prime Minister Fumio Kishida to explain the latest policy decision but did not discuss FX volatility. The meeting happened in anticipation of a potential intervention by the BOJ on instruction from the MoF to intervene in the markets as the yen remains weak and ahead of Ueda’s participation in the Fed’s Jackson Hole Symposium at the end of the week. The USD/JPY made another run towards its recent multi-month high and resistance just under ¥145.50, and keeping in its narrow range above a weak support at ¥145.00. Failing to hold it could expose ¥144.40 if the pair moves to correction.</p>
<h2>Series of Storms Rile Up Crude, Ends 1.50% Lower</h2>
<p>Crude prices fluctuated through the day after the US National Hurricane Centre showed that as many as three storms that could become Hurricanes were present in the North Atlantic. Tropical Depression Nine is expected to develop into a storm and hit the southern coast of Texas late on Tuesday, though refineries and offshore rigs remain operational. WTI lost 1.50T but stayed above the $80/bbl, with $82.20/bbl next up or $79/bbl down. In natural gas, European prices spiked over concerns of Australian workers at its LNG export facility providing a 7-day notice of strike over wages.</p>
<h2>On The Docket</h2>
<ul>
<li>CBI Industrial Trend Orders</li>
<li>Fed Barkin Speech</li>
<li>Existing Home Sales</li>
<li>Fed Goolsbee Speech</li>
<li>Fed Bowman Speech</li>
<li>API Crude Oil Stock Change</li>
<li>Judo Bank PMIs</li>
<li>BRICS Summit</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie up by 0.05%, Kiwi by 0.08%</li>
<li>Euro 0.12% higher, Pound 0.11% up</li>
<li>Yen 0.14% up, Swissy by 0.06%</li>
<li>Loonie unchanged</li>
<li>Gold 0.05% up, while Silver 0.02% down</li>
<li>Crude and Brent down by 0.14% and 0.16%</li>
<li>Natural gas 1.18% lower</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-22-08-2023-25142/">JASPER’S MARKET SQUAWK 22-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>