JASPER’S MARKET SQUAWK 15-11-2023

<h2>CPI Report Prices Out Rate Hikes</h2>
<p>Markets soared and the dollar tumbled in the aftermath of the buoyant inflation data coming out on Tuesday, with futures now pricing out all chances of further rate hikes and foreseeing earlier rate cuts.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone size-full wp-image-27038" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-5.png" alt="" width="1914" height="916" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-5.png 1914w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-5-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-5-1024×490.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-5-768×368.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-5-1536×735.png 1536w" sizes="(max-width: 1914px) 100vw, 1914px" /></p>
<p><strong>Chart: EURUSD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Markets Soar as Rate Hikes Fade After Inflation Data Shifts Investor Sentiment</li>
<li>Dollar Takes a Dive as CPI Report Disappoints, Fueling Rate Cut Speculation</li>
<li>UK Wage Growth Not Far From Records, Makes BOE Cuts Harder to Begin</li>
<li>Euro Shines Amid Dollar Collapse, German Sentiment Also Surged</li>
<li>China’s Property Woes Continue, Factory and Retail Data Support Oil Prices</li>
<li>Japan’s Economy Contracts, Recession Risks on the Rise</li>
</ul>
<h2>Dollar Tumbles 1.50% on Renewed Soft Landing Rhetoric</h2>
<p>Headline CPI inflation fell flat in October despite expectations for a 0.1 rise month-on-month, with core below forecast at 0.2. Yearly figures also dropped 10bps each, at 3.2% and 0.2%, respectively, boosting investor confidence that the Fed is done hiking and a soft landing is due.<br />
The dollar index lost 1.50% in its biggest decline over a year, stumbling upon support at 104. While trading under 104.83, sentiment will likely remain bearish, exposing 103.58 next.</p>
<h2>UK Wage Growth Not Falling Fast Enough for BOE Cuts</h2>
<p>Data from the Office for National Statistics showed wage growth edging slightly lower from 2001 records of 7.9%, suggesting that pay pressures are at least moving in the right direction, but not quickly enough for the BOE to consider cuts. Wages far exceeded expectations of 7.2%, which rose when adjusted for inflation. While job vacancies fell to their lowest level since mid-2021, the labour market remains very tight. GBPUSD soared 1.80% to 1.25 on the back of a weak dollar, eying 1.2588 next unless bulls fail to defend 1.2389.</p>
<h2>EURUSD Shy Off 1.09 to August High on Dollar Collapse</h2>
<p>Germany’s ZEW sentiment index rose to 9.8 in November from -1.1 points the month prior, exceeding analyst expectations. The expectations index was up for a fourth straight month, pointing to improving expectations for the German economy over the next six months. Meanwhile, Euro Area GDP growth confirmed quarterly contraction, but employment data beat forecasts. Euro scorched through 1.07 and 1.08 versus a collapsing dollar to reach an August high but struggled to move close to 1.09. 1.0942 is seen as the next resistance, with support laying at 1.08.</p>
<h2>WTI Ignores China Property Data, Weighs In Factory and Retail</h2>
<p>Data released by China’s National Bureau of Statistics (NBS) showed that China’s property sector continues to struggle, suggesting an ongoing slump despite efforts by the central bank to provide liquidity support. However, China’s factory output and retail sales beat expectations, supporting oil prices early Wednesday as China is a major oil consumer. The IEA also announced it joined OPEC in raising annual oil demand growth despite projections of slower economic growth, citing China oil consumption. WTI is still in a holding pattern, with support and resistance at 77.65 and 79.70 a barrel.</p>
<h2>Japan Recession Risks Accelerate as GDP Contracts</h2>
<p>Japan’s economy contracted by 2.1% in Q3, a significant decline from 4.5% in Q2, as consumption came in flat after falling 0.9% in Q2, suggesting that inflation is weighing on consumer spending. Service imports increased, and auto exports rose, but the recovery was not enough to offset the weakness in domestic demand, and wages have not increased enough to compensate for rising living costs. USD/JPY appears to be trading on a technical bias near 150.68 at the time of writing after witnessing a 0.90% plunge on Tuesday.</p>
<h2>On The Docket</h2>
<ul>
<li>DE Wholesale Prices</li>
<li>GB Inflation Rate</li>
<li>ECB Non-Monetary Policy Meeting</li>
<li>EA Industrial Production</li>
<li>US PPI</li>
<li>US Retail Sales</li>
<li>NY Empire State Manufacturing Index</li>
<li>Fed Barr Speech</li>
<li>EIA Crude Oil Stock Change</li>
<li>Fed Barkin Speech</li>
<li>European Commission Autumn Forecasts</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie down 0.09% while Kiwi 0.28% up</li>
<li>Euro 0.05 lower, Pound 0.07% down</li>
<li>Loonie 0.04% up, Frank at +0.02%</li>
<li>Japanese yen 0.20% lower down</li>
<li>Gold up by 0.22, Silver 0.49% in green</li>
<li>Crude 0.43% up, Brent 0.49% higher</li>
<li>Natural gas 0.64% in the red zone</li>
</ul>
<p>The post <a href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-15-11-2023-27034/">JASPER’S MARKET SQUAWK 15-11-2023</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>