JASPER’S MARKET SQUAWK 10-10-2023

<h2>Rally Reset After Dovish Fed Speak</h2>
<p>Monday turned out to be a brief pause of post-NFP momentum despite Middle East tensions, with the rebound largely attributed to dovish Fed speak. Gold and crude posted substantial gains as the dollar took the back seat.</p>
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<p>Chart: AUDUSD</p>
<h2>Key Factors for Today</h2>
<ul>
<li>Gold’s Rally Supported as Fed Voters Signal No More Hikes</li>
<li>Oil Prices Surge 4.35% Amidst Middle East Tensions</li>
<li>German Industrial Output Data Raise Recession Fears</li>
<li>Aussie Bulls Recapture 64 Cents After Chevron LNG Shutdown</li>
</ul>
<h2>Dovish Rhetoric from Fed Voters Grants Gold 1.60% Spike</h2>
<p>Fed officials indicated that the recent rise in US yields and tightening of financial conditions should entice the bank to keep rates at bay, supporting gold’s bolstering in the midst of a war. The dovish remarks of voters Philip Jefferson and Lorie Logan halved the likelihood of additional hikes in November from 27% to 14%. Already fuelled by the war, gold posted a $30 gain to $1861 an ounce, exposing $1885 next unless bulls lose $1850.</p>
<h2>WTI Gains 4.35% on Day 1 of War, Capped by Reality</h2>
<p>Rising fears that the conflict between Israeli and Hamas forces could spread beyond Gaza has kept oil prices close to Monday’s high of $87.25 a barrel. The day was capped at $86.40/bbl, 1% lower, as no major production distributions were reported. $84.90/bbl is short-term support, with expected resistance at $90/bbl. Meanwhile, hedge funds have become less bullish about rising prices, data from last week showed Monday.</p>
<h2>German Industrial Production Brings Recession Fears Back</h2>
<p>German Industrial production declined for the fourth consecutive month in August amidst declining energy production, down to -0.2% from the -0.1% expected, raising concerns about a recession. ECB’s Vice-President Luis de Guindos also cautioned about high oil prices despite expecting inflation to continue trending downward. EUR/USD saw an uptick due to a weaker dollar Monday but formed an inside bar with range limits at $1.06 and $1.048.</p>
<h2>Aussie Reclaims 64-Cent Barrier After LNG Platform Shutdown</h2>
<p>Demand for safe-haven metals and concerns about potential supply disruptions in oil and gas have contributed to boosting commodity currencies, including the Australian dollar. Safety concerns have seen Chevron’s LNG Tamar platform shut down, extending a helping hand to Aussie due to its proximity to the broader sectors. AUD/USD rose 0.90% on Monday, retaking control of the 64-cent barrier and leaving 0.6350 behind. Next up comes the 0.6447 resistance.</p>
<h2>On The Docket</h2>
<ul>
<li>ECB President Lagarde Speech</li>
<li>Fed Bostic Speech</li>
<li>Wholesale Inventories</li>
<li>Consumer Inflation Expectations</li>
<li>Fed Waller Speech</li>
<li>Fed Kashkari Speech</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie unchanged while Kiwi 0.07% lower</li>
<li>Euro 0.03% lower, Pound down twice that</li>
<li>Yen in red by 0.15%, while Franc 0.04% up</li>
<li>Canadian dollar sees 0.06% rise</li>
<li>Gold up by 0.55%, while Silver 0.22% in red</li>
<li>Crude 0.46% down, Brent follows at -0.42%</li>
<li>Natural gas futures 0.98% lower down</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-10-10-2023-26192/">JASPER’S MARKET SQUAWK 10-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>