JASPER’S MARKET SQUAWK 16-10-2023

<h2>Middle East Tensions Spark Gold Surge</h2>
<p>Investors flocked to gold and oil following increased tensions in the Middle East after Israel warned Gaza residents to evacuate North. US banks reported solid earnings, but a falling consumer sentiment due to concerns over inflation weighed on sentiment.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-26293 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-11.png" alt="" width="1913" height="912" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-11.png 1913w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-11-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-11-1024×488.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-11-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-11-1536×732.png 1536w" sizes="(max-width: 1913px) 100vw, 1913px" /></p>
<p><strong>Chart: GOLD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Middle East Tensions Fuel Surge in Gold Prices</li>
<li>Oil Prices Soar on Risk of Supply Disruptions</li>
<li>Inflation Concerns Rise Amidst Gaza Conflict</li>
<li>Kiwi Dollar Surges as National Party Claims Victory</li>
</ul>
<h2>Gold Soars 3.4% Following Evacuation Warning</h2>
<p>Concerns over an escalation in the Israel-Hamas conflict sent gold spiking more than $60 an ounce on Friday on rising safe-haven flows. It follows Israeli Prime Minister Benjamin Netanyahu’s warning to Northern Gaza residents to evacuate. Gold revisited 1-month highs, aided by a growing risk of stagflation, as the UoM Consumer Sentiment index fell more than expected to 63 while rising expectations for inflation saw a sharp rise. The yellow metal is taking a breather ahead of a possible extension to $1950/oz despite Iran’s weekend warning as Netanyahu agreed to lift a blockade of water supplies to Gaza, exposing support at $1900/oz.</p>
<h2>Risk of Crude Supplies Disruption Sees WTI 5% Higher</h2>
<p>The risk of crude oil disruptions was seen rising as major energy deals in the Middle East came under scrutiny in the wake of the war. Fears of a spread beyond Gaza bolstered $88.20 a barrel, opening up $90/bbl next unless bears lose $86. Over the weekend, Iran took a harder stance against the Israelis’ pledge to retaliate following allegations of aiding Hamas, further threatening supplies from the Middle East. France’s Macron attempted to de-escalate with his own warning, particularly to Lebanon.</p>
<h2>Italy’s Visco Concerned Over Inflation from Gaza Conflict</h2>
<p>Italian central bank governor Ignazio Visco expressed calm around the spread in yields but concerns that tensions in the Middle East could lead to inflation. ECB’s Christine Lagarde said over the weekend that inflation and wage growth are still strong in the eurozone and that she saw no slowdown in the jobs market. EUR/USD closed 0.20% on Friday due to a stronger greenback, but importantly managed above $1.05, with Lagarde’s comments offering nothing new. $1.045 is expected support while under $1.0558.</p>
<h2>Kiwi Spikes After National Party Wins Gen Elections</h2>
<p>New Zealand’s centre-right National Party led by Christopher Luxon will form a new government as Prime Minister Chris Hipkins lost the general election (to be final on Nov 3rd). The National Party won over voters by promising relief for middle-incomers and addressing inflation and debt. The New Zealand dollar jumped following the victory on the prospect of avoiding dysfunction in the government, up 0.67% on Monday and recovered all Friday’s losses at 0.5930. Bulls could be targeting 0.5960 next, with support left behind at 0.59.</p>
<h2>On The Docket</h2>
<ul>
<li>DE Industrial Producrion</li>
<li>Fed Logan Speech</li>
<li>Fed Barr Speech</li>
<li>Fed Jefferson Speech</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie up by 0.47%, Kiwi leads at +0.69%</li>
<li>Euro and Pound 0.20% and 0.18% higher</li>
<li>Yen and Swiss Franc 0.11% up each</li>
<li>Loonie 0.08% higher up vs dollar</li>
<li>Gold 0.44% lower, Silver down by 0.33%</li>
<li>Crude and Brent both 0.10 higher</li>
<li>Natural gas down by solid 2.94%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-16-10-2023-26292/">JASPER’S MARKET SQUAWK 16-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>