JASPER’S MARKET SQUAWK 18-07-2023

<h2>US Markets Higher, Against the Trend</h2>
<p>European and Asian equities were under pressure following China’s GDP yesterday, but US stocks pushed above a one-year high. Treasury yields got weaker on improved risk appetite, weighing on the dollar, with crude also weaker.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24309 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-54.png" alt="" width="1916" height="913" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-54.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-54-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-54-1024×488.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-54-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-54-1536×732.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /><em><strong>Chart: EURUSD</strong></em></p>
<h2>Key Factors For Today</h2>
<ul>
<li>US stocks break the trend, reaching new highs while global markets struggle</li>
<li>Strong US economy defies recession fears, as major indices surge over 1%</li>
<li>Despite production cuts, crude prices continue to decline</li>
<li>RBA minutes reveal uncertainty over interest rates</li>
<li>ECB hawks anticipate rate hikes, euro flat against dollar</li>
</ul>
<h2>US Indices Reach New Highs, Yellen Expects No Recession</h2>
<p>The NY Empire State Manufacturing Index came in above expectations at 1.1 compared to the -6.0 forecast, contributing to the narrative of a more resilient US economy, supported by disinflation and expectations Fed has reached the rate peak. All major indices rose over 1%. US Treasury Secretary Janet Yellen said she does not expect a recession this year. Nasdaq rose to 15750, leaving support at 15560 in an attempt at 16k.</p>
<h2>Crude Prices Lower Despite More Production Cuts</h2>
<p>Saudi Arabia announced that it would extend its voluntary 1M bbl/day production cut through the rest of the year. The Kingdom also reported May production at 9.96M bbl/day, down 502K boepd from the prior month. The EIA forecast that US shale production would be lower in August than in July, the first monthly decline since the end of last year. WTI lost 1.60% by day’s end despite rising to $76/bbl intraday, with support at $74/bbl. $72 is expected support above $70/bbl.</p>
<h2>RBA Minutes Show Uncertainty</h2>
<p>The minutes from the latest RBA decision, where rates were held steady, aligned mainly with expectations of a restrictive policy stance, but the case of an unchanged rate was stronger despite a quarter-point hike being discussed. Australian Treasurer Jim Chalmers said he expected inflation to moderate in the next reading (due next week). Aussie dropped some 0.80% to $0.6788 on Monday, where bulls saw an opportunity to send prices to $0.6815, only 0.39% lower. Overnight, and following the minutes, Aussie is seen trading higher.</p>
<h2>ECB Hawks See More Rate Hikes</h2>
<p>ECB official Joachim Nagel (Germany) affirmed his stance that he expected a quarter of a point rate hike in July but would have to see whether a hike in September was warranted. He was joined by fellow board member Bostjan Vasle (Slovenia), who reiterated the line that inflation was too high for too long, a view shared by ECB official Ignazio Visco, who addressed underlying inflation as stubborn. He was more optimistic about inflation dropping faster than expected but didn’t comment on future rate hikes.EUR/USD ended somewhat unchanged despite the dollar falling a little, but its bid early Tuesday, flirting with $1.1250 and a fresh 17-month high. $1.1229 remains support.</p>
<h2>On The Docket</h2>
<ul>
<li>Canadian Inflation</li>
<li>US Retail Sales</li>
<li>Industrial Production</li>
<li>NAHB Housing Market Index</li>
<li>Fed Barr Speech</li>
<li>API Crude Oil Stock Change</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.23% and 0.22% higher</li>
<li>Euro and Swissy up by 0.24% each</li>
<li>Loonie up 0.09%, Cable 0.18% higher</li>
<li>Yen 0.24% higher</li>
<li>Gold and silver are both up by 0.41%</li>
<li>Crude and Brent 0.28% higher each</li>
<li>Natural gas is up by 1.23%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-18-07-2023-24305/">JASPER’S MARKET SQUAWK 18-07-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>