JASPER’S MARKET SQUAWK 05-10-2023

<h2>Relief Rally Offers Respite Leading to NFP</h2>
<p>Yields stalled after reaching a cycle high following ADP’s cooler-than-expected hiring data Wednesday, offering a sigh of relief leading to the official NFP release, with gains mainly driven by travel and automotive stocks. Oil crashed over 5% on EIA’s gas build, helping ease inflation concerns.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-26108 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-10.png" alt="" width="1913" height="912" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-10.png 1913w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-10-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-10-1024×488.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-10-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-10-1536×732.png 1536w" sizes="(max-width: 1913px) 100vw, 1913px" /></p>
<p><strong>Chart: WTI</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Oil Sinks Over 5% Following Large Gas Build, US-SA Mega Deal</li>
<li>Large ADP Drop Stalls YIelds, Gives EURUSD Breathing Room</li>
<li>BOJ Data Suggests No Intervention at ¥150, Remains Volatilite</li>
<li>Pound Gains Momentum After UK Services PMIs Upward Revision</li>
</ul>
<h2>Oil Sinks Over 5% After EIA Reports Large Gas Build</h2>
<p>Oil prices experienced a steep drop not seen in over a year despite the EIA showing a 2.2M barrel build in crude stocks and confirmation from OPEC to maintain production levels as gasoline inventories added 6.5M barrels. WTI plunged 5.6% to settle at 85.81, erasing gains made since Saudi Arabia and Russia’s pledge, with next support at $82 and resistance at $86 a barrel. Meanwhile, a US-SA mega deal is brewing in the background, weighing on sentiment.</p>
<h2>Large ADP Drop Gives EURUSD Some Breathing Room</h2>
<p>Private payroll growth in September was significantly lower than the 153K expected, with job growth totalling just 89k, indicating a potential cooling in the labour market. It comes after a sharp rise in job openings on Tuesday, easing recent concerns until the NonFarm Payrolls shed more light. The dollar stalled, assisting EUR/USD bulls to bounce off further from the low of $1.045 and reclaim $1.05 despite worse-than-expect Retail Sales and mixed PMIs in the EU. The move was partially supported by ECB Lagarde’s hawkish stance and cooler ISM Services in the US. $1.0556 is expected resistance higher up.</p>
<h2>BOJ Data Suggest Bank Has Unlikely Intervened at ¥150</h2>
<p>The BOJ’s money market data suggested that Japan probably did not intervene in markets earlier inthe week, with Thursday’s projections aligning with expectations excluding intervention, at a 10 billion yen surplus. Despite the dollar ending broadly lower on Wednesday, USD/JPY closed the session mixed as traders entered a battleground without expected pressure from -at least- the BOJ, but volatility remains elevated. Eyes are on ¥147.87 and ¥149.58 next.</p>
<h2>UK Services PMIs Still in Contraction But Revised Up</h2>
<p>The final print of the S&amp;P Global Services PMI fell to 49.3 in September, below the 50 expansionary threshold but higher than the preliminary reading of 47.2. Along with the pause in the dollar’s rally, GBP/USD rose for the first time since last Thursday to lay eyes on $1.22 next. Above there, resistance is settled by $1.2237, with support exposed at the March low of $1.2036.</p>
<h2>On The Docket</h2>
<ul>
<li>German Exports</li>
<li>French Industrial Production</li>
<li>UK S&amp;P Global/CIPS Construction PMI</li>
<li>ECB Lane Speech</li>
<li>US Trade Balance</li>
<li>Initial Jobless Claims</li>
<li>Fed Mester Speech</li>
<li>ECB De Guindos Speech</li>
<li>Fed Bakin Speech</li>
<li>Fed Daly Speech</li>
<li>Fed Barr Speech</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi Upbeat, 0.67% and 0.56% up</li>
<li>Euro 0.17% up, Sterling higher at +0.19%</li>
<li>Yen 0.40% higher, Swissy 0.31% in green</li>
<li>Canadian dollar also up vs USD , at 0.17%</li>
<li>Gold 0.37% higher, Silver leads at +1.27%</li>
<li>Crude up by 0.4%, Brent higher at +0.48%</li>
<li>Natural gas futures up by 1.65%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-05-10-2023-26107/">JASPER’S MARKET SQUAWK 05-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>