JASPER’S MARKET SQUAWK 12-09-2023

<h2>Absence of News Leads Markets Higher</h2>
<p>Global indices were up across the board without major economic data events to dent optimism. Shorter-end yields slid with the dollar basket also lower on the yen following BOJ comments.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25575 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-91.png" alt="" width="1749" height="840" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-91.png 1749w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-91-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-91-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-91-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-91-1536×738.png 1536w" sizes="(max-width: 1749px) 100vw, 1749px" /><em><strong>Chart: GBPUSD</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Market Optimism Prevails as Absence of News Boosts Global Indices</li>
<li>US Auto Workers and Inflation Take Center Stage</li>
<li>BOE Signals Tightening Stance, Cable Breaks Losing Streak</li>
<li>BOJ Officials Seek to Clarify Governor’s Remarks, USD/JPY Volatile</li>
<li>Euro Gains Despite EU Outlook Cut, Weaker Dollar Supports</li>
<li>New Zealand’s Surprising Budget: Lower Borrowing and Smaller Bond Program</li>
</ul>
<h2>US Auto Workers Might Strike a Deal, Inflation in Focus</h2>
<p>US Deputy Treasury Secretary Wally Adeyemo said the auto industry and workers were in a good position to reach a deal. Comments came after press reports that UAW would reduce its wage increase demands. Meanwhile, the Fed’s August consumers survey saw 1-year inflation expectations ticking up to 3.6% from 3.5% in the prior month. Gold continued to range but reached a top of $1930/oz before recoiling back to $1920/oz, with the weakening of the support at $1915/oz exposing $1905/oz.</p>
<h2>BOE On Tightening Track, Cable Ends Losing Streak</h2>
<p>UK Chancellor of the Exchequer Jeremy Hunt said that more measures to boost the economy would be announced soon, ahead of the Autumn Budget. BOE member Catherine Mann (hawk) insisted on the need to do “what’s necessary” to bring inflation down “sooner rather than later”. Press reported that BOE futures see an 80% chance of a quarter-point rate hike at the September BOE meeting. Cable left a 4-day losing streak behind and support at $1.2450. Resistance is expected at $1.2577 if $1.2550 gives way to bulls.</p>
<h2>BOJ Officials Try to Walk Back Ueda’s Remarks</h2>
<p>In a press interview, LDP senior official Hiroshige Seko underlined that the comments from BOJ Governor Kazuo Ueda on wage growth that saw the yen strengthen were meant to imply the BOJ will continue with easing. The remarks were seen as part of comments from Japanese officials “walking back” some of the implications from Ueda’s comments, underlying that the exit from the easing policy will happen after the 2% inflation target is achieved. USD/JPY had a volatile session but closed with the yen in the lead, down to 146.63 and further from resistance at 147.28.</p>
<h2>Despite EU Outlook Cut, Euro Gains on Weaker Dollar</h2>
<p>In its summer economic forecast report, the European Commission cut its GDP forecast for the Euro Zone to 0.8% from 1.1% in the prior report, seeing Germany growing -0.4% this year, the only economy in the Area to have a contraction. It also cut its inflation outlook to 5.6% from 5.8% prior. EUR/USD advanced to $1.075 on Monday on a softer dollar, opening up $1.0795 unless bearish action brings the focus back to $1.07.</p>
<h2>New Zealand to Borrow Less Than Expected</h2>
<p>The government of New Zealand published its pre-election budget early Tuesday, which saw a rising deficit due to the slowing economy to NZD11.4B, below the NZD12.5B anticipated. The government also published a smaller-than-expected bond-buying program for the next four years, at NZD9.5B compared to NZD15B anticipated. After a spike to 0.5935 yesterday, the Kiwi started the session on bearish footing, trading near 0.59 and bringing 0.5887 in focus.</p>
<h2>On The Docket</h2>
<ul>
<li>GB Jobs Report</li>
<li>EA ZEW Economic Sentiment</li>
<li>API Crude Oil Stock Change</li>
<li>OPEC Monthly Report</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi up by 0.97% and 0.79%</li>
<li>Euro 0.13% lower, while Pound muted</li>
<li>Yen 0.15% in red, Franc 0.09% down</li>
<li>Canadian dollar 0.15% higher</li>
<li>Gold 0.17% down, while Silver unchanged</li>
<li>Crude 0.38% higher, Brent lags behind at +0.28%</li>
<li>Natural gas 0.15% higher</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/market-analysis/jaspers-market-squawk-12-09-2023-25574/">JASPER’S MARKET SQUAWK 12-09-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>