JASPER’S MARKET SQUAWK 10-08-2023

<h2>Risk Appetite Muted Ahead of Key Data</h2>
<p>European indices moved higher thanks to a rebound in banks, but US equities trended into the red while investors digested Chinese deflation ahead of the US CPI release. Gold fell for a third consecutive session this week as the dollar rose.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24884 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design.png" alt="" width="1747" height="836" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design.png 1747w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-1024×490.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-768×368.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-1536×735.png 1536w" sizes="(max-width: 1747px) 100vw, 1747px" /></p>
<p><strong>Chart: USD/JPY</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Risk Appetite Muted as Key Data Looms</li>
<li>Gold Drops on Chinese Deflation Rhetoric</li>
<li>Japanese PPI Misses Expectations, USD/JPY Rises</li>
<li>US Crude Stocks Confirmed Growing, But WTI Hits Nov Highs</li>
<li>AU Lower Inflation Expectations, AUD Impacts Mostrly By Banks</li>
<li>European Gas Prices Surge to March Highs</li>
</ul>
<h2>Gold Drops Ahead of US CPI, US Announces Investment Curbs</h2>
<p>Deflation in China caught markets’ attention as it is likely to reverberate globally, with the dollar’s rise pushing gold down. The yellow metal recorded a 3-day losing streak to $1915/oz, exposing the $1900 handle while under $1925/oz. Meanwhile, US President Joe Biden signed an executive order banning private equity and venture capital firms from investing in Chinese groups that are majority foreign-owned, with a focus on semiconductors, quantum computing and AI.</p>
<h2>Japanese PPI MIsses Expectations, USD/JPY on 3-Day Streak</h2>
<p>July PPI from Japan grew at a monthly rate of 0.1% compared to 0.3% expected, but the annual rate was above forecasts at 3.6% compared to 3.5% projected. However, it recorded the lowest growth rate since March of 2021, helping relieve some worries about inflationary pressure and weakening the yen. Prices are back above ¥144.00 this morning, with yesterday’s 0.26% rise increasing the chances of an attempt at ¥145.00. Losing ¥143.35 may enact additional drops.</p>
<h2>EIA Confirms API Stocks Build, But WTI Enter Nov Highs</h2>
<p>The DOE reported that US crude inventories grew by 5.9M bbl compared to +1.5M bbl expected, but gasoline saw a surprise drawdown of 2.7M bbl compared to just 0.5M bbl forecast. Total production ticked up to 12.6M bbl/day from 12.2M bbl/day prior. Expectations of increasing demand offset the data, with crude prices testing the highest level since November of 2022. OPEC+ production reportedly declined to the lowest level in two years, opening up $85.50/bbl and $90 in the nearest term. Bulls must defend $83.20/bbl to support the narrative.</p>
<h2>Australia Sees Lower Inflation Ahead, AUD Stumbles From Banks</h2>
<p>The August survey of consumer expectations for Australia sees inflation falling to 4.9% from 5.2%, which would be the lowest since April. But the Australian dollar seemed more affected by a pullback in Aussie shares, impacted mainly by bank stocks, marking a 0.25% drop to $0.6527. Still, AUD/USD traded in a tight range with limits at $0.6496 and $0.6576, pending a breakout.</p>
<h2>European Gas Prices Spike to March Highs Shy of $3</h2>
<p>Gas prices in the UK were up 25%, and EU natural gas spiked as much as 40% for a period before closing out around 25% higher. A strike in LNG facilities in Australia was seen as the catalyst, as the country is the second-largest LNG exporter. EU’s gas futures jumped to March highs shy of $3/cf, increasing speculation for a leg to $3.30/cf. $2.88/cf is expected support in case of pullbacks, with $2.69 opening the door to a full-blown reversal.</p>
<h2>On The Docket</h2>
<ul>
<li>US Inflation Rate</li>
<li>Initial Jobless Claims</li>
<li>Fed Harker Speech</li>
<li>Fed Bostic Speech</li>
<li>NZ Business PMI</li>
<li>OPEC Monthly Report</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie 0.25% up, Kiwi follows at +0.19%</li>
<li>Euro 0.10% higher, Pound lags at +0.02%</li>
<li>Yen 0.17% lower, while Swissy 0.06% up</li>
<li>Loonie 0.07% lower</li>
<li>Gold marginally down, Silver unchanged</li>
<li>Crude and Brent slightly changed</li>
<li>Natural gas higher by 0.37%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/market-analysis/jaspers-market-squawk-10-08-2023-24880/">JASPER’S MARKET SQUAWK 10-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>