JASPER’S MARKET SQUAWK 14-08-2023

<h2>Markets Take Risk-Off Tone With China in Focus</h2>
<p>Global equities were lower, with US big tech among the worst performers after the US PPI was hotter than expected, raising the prospect of higher inflation for longer. The dollar rose, with the index nearing 103.00 territory after 5 weeks.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24960 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Chart14082023.png" alt="" width="1753" height="835" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Chart14082023.png 1753w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Chart14082023-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Chart14082023-1024×488.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Chart14082023-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Chart14082023-1536×732.png 1536w" sizes="(max-width: 1753px) 100vw, 1753px" /></p>
<p><strong>Chart: GBPUSD</strong></p>
<h2>Key Factors For Today</h2>
<ul>
<li>Markets in Risk-Off Mode as China Takes Center Stage</li>
<li>Dollar Surges on Growing Inflation Concerns, Fed Action Possible</li>
<li>RBA Governor’s Comments Send Aussie Dollar Under 65 Cents</li>
<li>UK GDP Surprise LIfts Pound as Recession Risk Seen Diminishing</li>
<li>China Property Market in Financing Troubles, State Intervention Possible</li>
</ul>
<h2>Dollar Up As PPI Raises Fed Action Risk</h2>
<p>Monthly US July PPI jumped to 0.3% from 0.0% prior, and above the 0.2% forecast, with core PPI having an even larger move higher to 0.3% from -0.1% prior. Purchasing pressures could keep inflation elevated and risk further action by the Fed. Short-term yields were supported following the news. The dollar gained additional strength over the weekend as markets were concerned about China’s building sector. Japanese yen popped to ¥145.00, where it is believed that the BOJ intervened in the autumn of last year. ¥145.70 is the expected resistance lacking a double top formation, whereas ¥143.92 support.</p>
<h2>Aussie Drops on Lowe’s Inflation Remarks</h2>
<p>Outgoing RBA Governor Philip Lowe said recent data was consistent with a soft landing, where inflation eases without a large rise in unemployment. He added the RBA is now in the “calibration stage” since rates are already restrictive and working. The Aussie dollar fell below $0.65 following the comments and falling iron ore prices due to concerns about Chinese shadow banking. Losing $0.6457 may precipitate further pain towards the lower handle of $0.64, with decent resistance remaining shy of $0.65.</p>
<h2>UK GDP Surprise Seen Supporting Cable</h2>
<p>Preliminary Q2 GDP was reported at 0.2% compared to 0.1% expected, thanks to June’s figure jumping 0.5% from -0.1% prior. July manufacturing staged a strong recovery, growing at 2.4% compared to -0.1% prior. The stronger GDP figure was seen as giving more room for BOE as the risk of the UK falling into a recession could be diminished, with Cable ending a 3-day losing streak on Friday shy of $1.27. If bulls can reclaim the barrier, a chance at $1.2741 may reveal itself; otherwise, the door to $1.2620 remains wide open for further speculation.</p>
<h2>China Property Market Receives Blow</h2>
<p>Over the weekend, rumours circulated that Chinese developers were facing financing troubles again, with Sino-Ocean suspending its 2024 notes due to lack of payment. This follows the largest developer in the country, Country Garden, taking a similar measure on Friday. Chinese equities fell in Monday trading, with speculation around state intervention elevated. USD/CNH bulls are seen attempting June’s high at ¥7.28, with a takeover clearing the path to ¥7.33 and a failure easing prices towards ¥7.23.</p>
<h2>On The Docket</h2>
<ul>
<li>Halifax House Price Index</li>
<li>Fed Bowman Speech</li>
<li>Fed Bostic Speech</li>
<li>BRC Retail Sales Monitor YoY</li>
<li>RBA Schwartz Speech</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.30% lower down each</li>
<li>Euro and Pound both 0.09% in the red</li>
<li>Yen unchanged, Swissy 0.10% lower</li>
<li>Loonie 0.13% lower</li>
<li>Gold 0.12% down, Silver lower down at -0.39%</li>
<li>Crude and Brent suffer 1.06 and 0.99% losses</li>
<li>Natural gas higher by 0.43%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-14-08-2023-24959/">JASPER’S MARKET SQUAWK 14-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>