JASPER’S MARKET SQUAWK 04-09-2023

<h2>US Jobs Report Signals Smooth Landing</h2>
<p>Key indices initially rose on a softer jobs report but reversed after ISM pushed yields higher. Despite the dollar rise, crude scored its best weekly performance since March.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25388 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-80.png" alt="" width="1913" height="914" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-80.png 1913w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-80-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-80-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-80-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-80-1536×734.png 1536w" sizes="(max-width: 1913px) 100vw, 1913px" /><em><strong>Chart: XWTI</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li> NFP Data Bolsters Investor Confidence Until ISM Manufacturing PMI Happened</li>
<li> ECB Has to Deal with Manufacturing Contraction While Close to Peaking Rates</li>
<li> Crude Oil Surges on Expected Saudi Cuts, OPEC+ Expected to Announce 1M Reductions</li>
<li> China’s Support Measures Boost Asian Markets, Fuels Aussie Dollar After Upbeat Jobs</li>
</ul>
<h2>NFP Optimism Short-lived as ISM Disappoints Investors</h2>
<p>August NFP was slightly above expectations at 187K compared to 180K, but unemployment jumped to 3.8% versus 3.5%. The average hourly earnings also disappointed, growing only 0.2%. The initial market reaction was positive, as the data was interpreted as giving the Fed room to pause rates this year. Still, optimism reversed after ISM Manufacturing PMI beat forecasts, rising to 47.6 compared to the 47.0 expected. This suggested that inflationary pressures have not gone away, boosting the dollar. Cable was among the most impacted, losing 0.70% on the day to $1.2584. $1.2549 is lower support unless bulls reclaim $1.2652.</p>
<h2>ECB Close to Peak and Dealing with Manufacturing Contraction</h2>
<p>ECB official Francoise Villeroy (France) noted that the ECB is “very close” to peak rates, and options were still open at the next meeting. Meanwhile, Euro Area Manufacturing PMIs were confirmed well in contraction, with the French number revised lower. The poor data front and a stronger dollar contributed to the euro’s demise. EUR/USD dropped to $1.0773 on high momentum, increasing speculation for further descents towards the $1.07 handle if 32 gives way. Declines may take longer if bulls can take over the $1.0823 interim resistance.</p>
<h2>Crude Extends Nearly 3% Higher on Saudi on Expected Cuts</h2>
<p>Press reports suggested that Saudi Arabian crude production in August fell to 5.6M bbl/day, compared to 6.8M bbl/d in June. However, rises in Nigeria and Iran’s production have offset the discrepancy, but crude still rose on expectations that OPEC+ will announce further cuts of 1 million bpd. WTI rose to the highest since mid-November last year at $86 a barrel to mark a 4-day streak, opening the door to $87.40/bbl. Below $84.80/bbl, bulls must hold the $83.50/bbl line.</p>
<h2>Asia Risk Appetite Bolstered by More Support from China</h2>
<p>The Chinese government offered new support measures for the property sector, which led to equity gains in the region early Monday. Country Garden secured an extension in maturity in some of its loans, helping alleviate some worries about the credit situation in China. Australia is among the better-performing commodity currencies after August Job adds grew 1.9% compared to 0.7% in the prior month. Up 0.34% at the time of writing, AUD/USD bulls may have initiated a leg towards 65 cents already, making $0.6440 all more important.</p>
<h2>On The Docket</h2>
<ul>
<li>Bundesbank President Nagel Speech</li>
<li>Dallas Fed Manufacturing Index</li>
<li>Bundesbank Balz Speech</li>
<li>Japan Unemployment Rate</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie 0.43% higher, Kiwi lags at +0.23%</li>
<li>Euro 0.14% up, Pound higher on a 0.20% gain</li>
<li>Yen 0.05% higher, Swiss Franc also up by 0.11%</li>
<li>Canadian dollar is 0.05% higher than greenback</li>
<li>Gold and Silver put a 0.25% gain in</li>
<li>Crude up by 0.07%, Brent only by 0.02%</li>
<li>Natural gas is down a substantial 2.82%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-04-09-2023-25384/">JASPER’S MARKET SQUAWK 04-09-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>