JASPER’S MARKET SQUAWK 08-09-2023
<h2>Markets Shy of Risk as Fed Expectations Mount</h2>
<p>Global equities were once again lower on risk-off moves as the dollar gained and VIX moved higher after US data pointed to continued labour tightness.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25475 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-86.png" alt="" width="1917" height="915" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-86.png 1917w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-86-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-86-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-86-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-86-1536×733.png 1536w" sizes="(max-width: 1917px) 100vw, 1917px" /><em><strong>Chart: EURUSD</strong></em></p>
<h2>Key Factors For Today</h2>
<ul>
<li>Markets Retreat as Fed Expectations Rise on Labour Data</li>
<li>Gold Climbs Despite Fed Prospects Boosting Greenback</li>
<li>EIA Confirms Large Inventory Draw, But WTI Slips</li>
<li>EURUSD Hits June Low after Downward GDP Revision</li>
<li>Disappointing UK Data Adds to Cable’s Losing Streak</li>
<li>Loonie Drops to March Low Against USD on Growth Concerns</li>
</ul>
<h2>Gold Higher Despite Fed Prospects Fueling Dollar</h2>
<p>Weekly initial jobless claims were well below forecasts at 216K compared to 234K expected, the lowest reading since March. Continuing claims also fell to the lowest since January at 1.68M, below the 1.72M expected. The apparent tightness in the labour market, combined with the prior report of rising prices in the ISM services component, fueled speculation that the Fed might go through with a final hike. A series of Fed speakers throughout the day suggested that FOMC members are still willing to tighten, with the general theme being that policy has come a long way, but it’s not certain that enough has been done yet. However, gold ended Thursday higher following a rejection at the 20-day SMA, as the 2-year yield eased back below 5%. $1930 is the next resistance on that pace early Friday.</p>
<h2>EIA Confirms Large Draw, But WTI Tunred Anyway</h2>
<p>The EIA reported that US crude inventories fell 6.3M bbls last week, more than the 2M bbls forecast. US exports increased to 11.4M bbl from 10.4M bll prior, while the SPR added 0.8M bbls in the same period. But Crude prices slipped on a stronger dollar, and markets adjusted after a multi-year record gain streak at $88, bringing $85 a barrel back in focus.</p>
<h2>EURUSD to Fresh June Low After GDP Revision</h2>
<p>The final reading for the Euro Area’s GDP growth was revised to 0.1% from 0.3% and below the initial 0.2% that economists had forecasted. Government spending grew at 0.2% in the period. Annual GDP growth was also revised to 0.5% from 0.6%. The latest poll of economists shows a relatively small majority (57%) expect the ECB to hike when it meets in less than two weeks’ time. Euro bulls barely managed to sustain a close above $1.07, with the lower slide opening up $1.0665.</p>
<h2>Disappointing UK Data Mark 3-Day Losing Streak for Cable</h2>
<p>The August Halifax House Price index fell -1.9% compared to -0.1% expected, and an accelerating decline from -0.4% in July. REC reported that UK employers cut hiring at the fastest pace since June of 2020, and temporary work hiring fell for the first time since the middle of 2020. The number of applicants for work was seen rising, a sign of loosening labour conditions in the UK, which could alleviate pressure on the BOE to keep hiking. Cable suggested as such after dropping to an early June low of $1.2445 to mark its third consecutive day of declines, exposing $1.24 unless bulls reclaim $1.2530.</p>
<h2>Loonie Swoons to a March Low on Growth Concerns</h2>
<p>Generalized risk-off sentiment weighing on commodities after the BOC did not deliver a rate hike earlier this week left the Canadian dollar at a five-month low against its southern counterpart. With a pullback commencing shy of $1.37, bulls might look into securing some more profits toward $1.3634, with a rejection there increasing the chances of a fresh high towards $1.3738.</p>
<h2>On The Docket</h2>
<ul>
<li>Fed Barr Speech</li>
<li>DE Inflation</li>
<li>CA Jobs Data</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi upbeat, up 0.33% and 0.45%</li>
<li>Euro 0.21% higher, Pound lags up by 0.19%</li>
<li>Yen is up by mere 0.04%, Franc 0.21% in green</li>
<li>Canadian dollar no exception, 0.16% higher</li>
<li>Gold and Silver 0.35% and 0.49% higher</li>
<li>Crude and Brent down by 0.71% and 0.6%</li>
<li>Natural gas up by 0.7%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-08-09-2023-25471/">JASPER’S MARKET SQUAWK 08-09-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>
Leave a Comment