JASPER’S MARKET SQUAWK 15-09-2023

<h2>End of Hike Cycle Speculation Buoys Markets</h2>
<p>Global equities were a sea of green, with the dollar gaining thanks to a weaker euro following rampant speculation the ECB is done with hikes.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25622 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-94.png" alt="" width="1751" height="836" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-94.png 1751w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-94-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-94-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-94-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-94-1536×733.png 1536w" sizes="(max-width: 1751px) 100vw, 1751px" /><em><strong>Chart: AUDUSD</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>ECB Signals End of Hike Cycle, Boosting Global Equities and Dollar’s Strength</li>
<li>US Inflation Narrative Pushes Dollar Higher, Cable Lags Behind in Retail Sales Surge</li>
<li>Surprise ECB Hike Suggests End of Cycle, Eurodollar Rate Hits May Low</li>
<li>European Nations Unite Against Iran Deal, WTI Surges to 10-Month High</li>
<li>Strong Chinese Data Bolsters Australian Dollar, Opens Doors for Further Upside</li>
</ul>
<h2>US Inflation Narrative Boosts Dollar, Weighs on Cable</h2>
<p>More evidence of strong consumer demand came out on Thursday, with Advance Retail Sales well above consensus at 0.6% for August, ahead of the 0.1% expected, scoring a fifth consecutive month of growth. August PPI jumped 0.7% compared to 0.4% expected, affirming concerns that inflation remains active, with US yields moving higher and propelling the dollar index to a 6-month high. As a result, cable fell 0.67% to a June low of $1.24, leaving behind resistance at $1.2490 and marching towards $1.232 next.</p>
<h2>ECB Hikes, Signals It’s the Last Time This Cycle</h2>
<p>The ECB raised interest rates a quarter of a point, catching markets off-guard after a near-even split of forecasts for a hold or a rate hike. The accompanying statement said that the ECB considers it has reached a level that, if maintained for a sufficiently long time, will contribute to inflation returning to target. While not explicitly ruling out further hikes, the language was interpreted as a signal that tightening will not continue. At the same time, ECB staff projections cut the GDP growth outlook for this and the next year, adding to the bearish rhetoric. The eurodollar rate reached a May low of $1.0633, opening the door to $1.0584 as long as the price remains under $1.0687.</p>
<h2>European Nations Opposing Iran Deal Bolsters WTI</h2>
<p>The EU’s foreign policy chief, Josep Borrell, disclosed a letter from France, the UK and Germany insisting on maintaining sanctions on Iran. White House official Amos Hochstein confirmed that the government would continue replenishing the SPR, hinting that the $70/bbl price threshold remained intact. Combined with stronger consumer demand data in the US, WTI broke $90/bbl, a fresh 10-month high, after rising 2.15% Thursday. If bulls can sustain $89.60 a barrel, the upside move may continue towards $92/bbl.</p>
<h2>Chinese Data Comes in Strong, Supports Aussie</h2>
<p>August, China’s Industrial production increased by 4.5%, above the 3.9% forecast. Retail sales were also particularly positive, growing at 4.6% above the 3.0% forecast. China’s surveyed jobless rate decreased to 5.2% from 5.3% prior. The Aussie was among the best gainers in response to the strong data dump from China, up 0.45% to 0.6468 at the time of writing early Friday. 0.6450 is critical support for bullish price action, as it can open up 0.65 or 0.6420.</p>
<h2>On The Docket</h2>
<ul>
<li>EA Trade Balance</li>
<li>ECB President Lagarde Speech</li>
<li>US Import, Export Prices</li>
<li>NY Empire State Manufacturing</li>
<li>Industrial Production</li>
<li>Michigan Consumer Sentiment</li>
<li>Eurogroup Meeting</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.41% and 0.35% higher</li>
<li>Euro up by 0.07%, Pound by 0.12%</li>
<li>Yen and Swiss Franc are barely positive</li>
<li>Canadian dollar manages 0.04% tilt</li>
<li>Gold 0.23%higher; Silver jumps 0.84% up</li>
<li>Crude and Brent 0.75% and 0.73% higher</li>
<li>Natural gas 0.3% in red</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-15-09-2023-25621/">JASPER’S MARKET SQUAWK 15-09-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>