JASPER’S MARKET SQUAWK 14-11-2023

<h2>Markets Brace for Inflation Release</h2>
<p>Stock indices had a mixed session on Monday, focusing on upcoming inflation data and weakness in the Japanese yen.</p>
<p><img decoding="async" class="alignnone wp-image-26996 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-4.png" alt="" width="1915" height="914" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-4.png 1915w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-4-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-4-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-4-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-4-1536×733.png 1536w" sizes="(max-width: 1915px) 100vw, 1915px" /></p>
<p><strong>Chart: GBPUSD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Yen Near 33-Year Low vs Dollar on Increasing Speculation of Slower BOJ Exit</li>
<li>UBS, Morgan Stanley and Goldman Sachs Forecasts on Fed Rate Cuts Diverge</li>
<li>ECB Rate Cut Unlikely Until Summer 2024, Poll Reflects Shift in Sentiment</li>
<li>Pound Spikes as David Cameron Returns to UK Cabinet After Sunak Reshuffle</li>
<li>WTI Oil Higher Amid SPR and OPE, Demand and Disruption Concerns Drive Gains</li>
</ul>
<h2>Yen Near 33-Year Low Against Dollar on Rate Differentials</h2>
<p>The Japanese yen nears a 33-year low against the dollar as markets believe the BOJ will exit its policy slower while the prospects of higher rates elsewhere rise.<br />
Despite recent optimism about the end of the Fed’s hiking cycle, there is wide-ranging speculation on interest rate trends for 2024, but even the most bearish is for March 2024. On the contrary, former top economist Hidelo Hayakawa expects the central banks to exit in April. Japan’s Finance Minister Shunichi Suzuki commented on the yen’s weakness, implying that Tokio would intervene in the currency markets, whereas Deputy Governor Shinichi Uchida underlined the importance of lifting wages. USDJPY has support at 151.44.</p>
<h2>Major Banks Disagree on Fed Rate Cut Forecasts for 2024</h2>
<p>UBS predicts a dovish Fed with seven rate cuts, while Morgan Stanley foresees a “soft landing” with four rate cuts, and Goldman Sachs projects only one cut with a 15% recession probability. Meanwhile, a New York Fed survey showed a slight decrease in consumer expectations for 12-month inflation to 3.6% from 3.7%, providing positive news on the inflation front. The US index dropped yesterday to 105.65, exposing 105.52 on its way there and leaving behind resistance at 105.96.</p>
<h2>Reuter Poll Shows No ECB Rate Cut Until Next Summer</h2>
<p>Most economists polled by Reuters believe there will be no rate cuts in the eurozone before the summer of 2024, with the ECB expected to hold until at least July of 2024. Despite markets expecting an April cut and a recession, the poll suggested President Christine Lagarde’s recent remarks about a premature cut might have changed that sentiment. Morgan Stanley somewhat affirmed the new narrative, saying it expects the ECB’s first cut to occur in June. Meanwhile, Italy’s central bank expects its economy to grow 0.7% in 2023 despite stagnating in Q3. The gov faces difficulty obtaining a EUR 90B Q4 recovery fund tranche from the EU. Euro failed to reclaim 1.07 again, but recent attempts brought 1.0728 in focus. Losing 1.0667 would imply more pain ahead.</p>
<h2>Pound Jumps on Cameron’s Return Following Sunak Reshuffle</h2>
<p>UK Prime Minister Rishi Sunak reshuffled the cabinet, firing interior minister Suella Braverman and appointing former PM David Cameron as foreign minister. The British Pound jumped following the announcement, but analysts already suggest the trend will depend on economic data and the fate of the US dollar. Up 0.43% on Monday to 1.2278, GPBUSD sees increased speculation for a tick past 1.23 next. Support can be expected at 1.2242.</p>
<h2>WTI Forms Bullish Streak Following SPR, OPEC Report</h2>
<p>Despite a recent market sell-off, oil found support at 76.30 as the DOE announced plans to buy 1.2 million barrels of oil to replenish its SPR. OPEC’s monthly report also supported oil, revealing strong demand and expressing disruption concerns as the US tightens regulations and scrutiny on Russian exports. If bulls continue to add to the 1.82% gain, the next resistance lies at 80.</p>
<h2>On The Docket</h2>
<ul>
<li>GB Employment Change</li>
<li>EA Employment Change</li>
<li>EA GDP Growth Rate</li>
<li>EA and DE ZEW Sentiment</li>
<li>Fed Jefferson Speech</li>
<li>US Inflation Rate</li>
<li>Fed Barr Speech</li>
<li>Fed Mester Speech</li>
<li>Fed Goolsbee Speech</li>
<li>API Crude Oil Stock Change</li>
</ul>
<h2>Fx 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.11% in the red each</li>
<li>Euro muted, whereas Pound 0.05% down</li>
<li>Loonie 0.14% down, Frank at minus 0.07%</li>
<li>Japanese yen unchanged at 0.01%</li>
<li>Gold 0.08% down, while silver 0.05% up</li>
<li>Crude and Brent 0.24% in the green zone</li>
<li>Natural gas 0.56% in positive territory</li>
</ul>
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<p>The post <a href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-14-11-2023-26992/">JASPER’S MARKET SQUAWK 14-11-2023</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>