JASPER’S MARKET SQUAWK 03-10-2023

<h2>Dollar Extends Rally After Brief Pullback</h2>
<p>The gloomy market sentiment continued on Monday after a brief relief from a government shutdown aversion, but hawkish rhetoric from the Fed sent the dollar to fresh highs, weighing on counterparts, along with better ISMs in the US.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-26093 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-9.png" alt="" width="1913" height="912" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-9.png 1913w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-9-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-9-1024×488.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-9-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-9-1536×732.png 1536w" sizes="(max-width: 1913px) 100vw, 1913px" /></p>
<p><strong>Chart: USDJPY</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Dollar Rally Continues as Market Sentiment Remains Gloomy After Brief Relief</li>
<li>Gold Slumps 1.20% as Hawkish Speakers and Better ISM Fuel Dollar Strength</li>
<li>Concerns Rise over Japanese Intervention as Yen Edges Closer to 150</li>
<li>EU PMI Surprise Not Enough Against a Strengthening Greenback</li>
<li>RBA Holds Rates, Australian Dollar Sinks to New November Lows</li>
</ul>
<h2>Gold 1.20% Lower After Hawkish Speakers, Better ISM</h2>
<p>Fed Chair Jerome Powell and other policymakers see restrictive policy lasting “for some time.” as most expect stronger economic growth and job markets. While some disagreed on whether an additional rate increase is needed this year, others pointed out risks from rising energy prices. Meanwhile, September’s ISM Manufacturing rose from 47.9 to 49, better than the 48.1 expected, with the S&amp;P Global closing in on expansionary territories just below 50. Prices paid decreased while new orders accelerated. The rise in the dollar saw gold plunging below $1830 an ounce, with pressure lingering early Tuesday, increasing speculation for $1800 unless bulls reclaim $1850/oz.</p>
<h2>BOJ Intervention Fears Mount as Yen Approaches 150</h2>
<p>Fears of a Japanese currency intervention mount as the yen approaches the 150 round level. Japanese Finance Minister Shunichi Suzuki stated that any intervention would not be based on specific levels. The BOJ announced 2.01 billion yen worth of the 10-year last Friday, indicating heightened expectations for wage rises and the possibility of a near-term policy shift. Minutes showed rising prospects of exiting ultra-loose policy. However, USD/JPY keeps closing in, with the support at 149.32 appearing strong without a 150 trigger.</p>
<h2>EU PMIs Surprise But Euro Weighed by Stronger Greenback</h2>
<p>The PMI narrative was also seen in Europe. Spanish, Italian and French Manufacturing PMIs all exceeded expectations and recorded advances. Germany’s HCOB also improved but matched expectations, with the broader EA PMI aligning with economic forecasts. EUR/USD reached its lowest point since December, below $1.05, and with little economic data to divert attention from concerns about interest rates and rising yields, the risk of sliding to $1.04 next remains increased. If bulls can take control of $1.0515, the tide may shift.</p>
<h2>RBA Holds Rates Unchanged, Aussie to Fresh Lows</h2>
<p>The RBA has decided to keep interest rates unchanged for the fourth consecutive month at 4.10% but said further tightening may be necessary to control inflation. The Aussie was already down 0.90% on Monday, with the overnight event adding to pressure, sending AUDUSD to a fresh November low and towards 0.63. A break lower would open up 0.6272, with short-term resistance seen at 0.6333.</p>
<h2>On The Docket</h2>
<ul>
<li>UK Nationwide Housing Prices</li>
<li>HCOB Manufacturing PMI</li>
<li>UK S&amp;P Global/CIPS Manufacturing PMI</li>
<li>S&amp;P Global Manufacturing PMI</li>
<li>ISM Manufacturing PMI</li>
<li>Fed Chair Powell Speech</li>
<li>Fed Harker Speech</li>
<li>Fed Barr Speech</li>
<li>Fed Williams Speech</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.87% and 0.68% lower</li>
<li>Euro down by 0.13%, Pound by 0.20%</li>
<li>Yen 0.05% lower, Swissy 0.15% down</li>
<li>Canadian dollar also down, by 0.28%</li>
<li>Gold and Silver in red by 0.67% and 1.08%</li>
<li>Crude 0.84% down, Brent at -1.06%</li>
<li>Natural gas up by mere 0.07%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-03-10-2023-26092/">JASPER’S MARKET SQUAWK 03-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>