JASPER’S MARKET SQUAWK 05-09-2023

<h2>China Services PMI Puts an End to Thin Run</h2>
<p>European markets opened broadly in the green Monday but turned around throughout the day in thin trading with the US out on holiday and as investors weighed disappointing Chinese data.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25422 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-83.png" alt="" width="1914" height="915" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-83.png 1914w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-83-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-83-1024×490.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-83-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-83-1536×734.png 1536w" sizes="(max-width: 1914px) 100vw, 1914px" /><em><strong>Chart: EURUSD</strong></em></p>
<h2>Key Factors For Today</h2>
<ul>
<li>China Services PMI Disappoints, Weighing on Markets</li>
<li>OPEC+ Expected to Cut Production, Crude Prices Revive</li>
<li>Australia&#8217;s Services PMI Contracts for Second Month in a Row</li>
<li>Germany and Euro Area Data Disappoint, EUR/USD Remains Firm</li>
</ul>
<h2>Markets Turn Following Softer Caixin Print</h2>
<p>Increased risk following announcements by the Chinese government that would support the housing market turned around on a combination of profit-taking and China&#8217;s disappointing data late Monday. Caixin Services PMI fell to 51.8 compared to 54.0 expected, with property developers among the largest underperformers. The US dollar saw support against the Japanese yen, taking on 146.50 and further away from 146. Next up lies the 147.40 resistance.</p>
<h2>Crude Revived by Expected OPEC+ Cuts</h2>
<p>Press reports suggested that OPEC+ would extend recent production curbs despite higher prices when the cartel meets later this week. WTI traded as low as $85.30 a barrel on Monday, closing the day only 10 cents lower at $85.90/bbl. Breaking higher would open up $87.80 unless $86 holds and crude pulls back towards $83.50 a barrel.</p>
<h2>Australia Services Confirm Consecutive Contraction</h2>
<p>Australia&#8217;s Services PMI, in its final reading, confirmed the second straight month of contraction. At the same time, the Current Account fell to AUD7.7B compared to AUD8.0B expected, leading to a drop in Aussie slightly before the RBA rate decision. AUD/USD is down 0.63% at writing, exposing $0.6380 next should bears reclaim the 64-cent handle. Conversely, resistance can be seen at $0.6438.</p>
<h2>EUR/USD Undettered Despite Germany Still in Recession</h2>
<p>Germany saw an unexpected drop in its trade surplus to $15.9B from $18.7B prior, and $19.1B expected, from a sudden drop in exports and a rise in imports. Meanwhile, Euro Area Sentix investor confidence fell to -21.5 from -18.9, with the agency noting that Germany remains in a recession. EUR/USD ended the session on the positive side regardless of the softer data print early Monday, with a retest at $1.08, raising chances for further ascends towards $1.0822. Losing the regional support at $1.0772 may drag the euro lower.</p>
<h2>On The Docket</h2>
<ul>
<li>RBA Interest Rate Decision</li>
<li>ECB President Lagarde Speech</li>
<li>ECB Consumer Expectation Survey</li>
<li>HCOB Services PMI Final</li>
<li>S&amp;P Global/CIPS Services PMI Final</li>
<li>Factory Orders MoM</li>
<li>AU GDP Growth Rate</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.88% and 0.55% down</li>
<li>Euro 0.10% lower, Pound down 0.06%</li>
<li>Yen dropped 0.27%, Swiss Franc at 0.22%</li>
<li>Canadian dollar down by 0.55%</li>
<li>Gold 0.22% up, while Silver 1.66% in the red</li>
<li>Crude is 0.39% higher, while Brent is 0.15% lower</li>
<li>Natural gas down a notable 4.48%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-05-09-2023-25418/">JASPER&#8217;S MARKET SQUAWK 05-09-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>