JASPER’S MARKET SQUAWK 19-10-2023

<h2>Risk Aversion Continues to Prevail</h2>
<p>The yellow metal soared again on the backdrop of a red stock market as investors continued to flock to safe havens and yields back at home amidst rising Midlle-East tensions and growing expectations of “higher-for-longer” rates – respectively. The 10-year hit a fresh 2007 high.</p>
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<p><strong>Chart: GBPUSD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Gold Prices Surge Amid Escalating Israel-Hamas Tensions</li>
<li>Fed Speak Signals Concerns About Elevated Prices, Yields Rise</li>
<li>Oil Prices Retreat on Venezuelan Election Deal and OPEC+ Response</li>
<li>UK Inflation Defies Expectations, Pound Stumbles Against Firm USD</li>
<li>Australian Jobs Report Disappoints, Aussie Dollar Dips to 63 Cents</li>
</ul>
<h2>Israel-Hamas Conflict Boost Gold 1.30% as Tensions Rise</h2>
<p>Gold prices continued to rise on the back of ongoing escalation in the Israel-Gaza conflict following the deadly blast on Gaza’s hospital. The yellow metal is up over 6% since the instigation of the war, peaking at $1963 an ounce, exposing $1980 next. Support is expected near $1930.</p>
<h2>Fed Speak and Beige Book Point to Still Elevated Prices</h2>
<p>Fed Governor Christopher Waller and John Williams were among the latest policymakers to signal a pause as they wait for a resolution from economic data and geopolitics to pan out. But they noted high prices, which was also indicated in the Feds’ Beige Book. Yields were seen rising as the 20-year bond reopening drew $13B, 5.245% versus 4.592%, suggesting interest rates will not come down soon. The dollar rose slightly to 149.95 against the Japanese yen, prompting the BOJ to announce $2B in emergency bond-buying to keep downward pressure on Japanese yields.</p>
<h2>WTI Gives Back Nearly 2.5% Gains on Venezuelan Election Deal</h2>
<p>Crude oil prices spiked 2.50% shy of $90 following Middle-East tensions, ushering to Iran’s call for an embargo on Israel over concerns of further escalation ahead of US President Joe Biden’s visit to Israel. But prices recoiled nearly all gains as Iran’s call was brushed aside at OPEC+, sliding back to $88 a barrel, supported by easing sanctions against Venezuela’s sector in response to a deal reached for the 2024 election. Biden plans to calm nerves at an Oval Ofice address later today.</p>
<h2>UK Inflation Stubbornly Unchanged Against Expectations</h2>
<p>Inflation numbers in the UK rose more than expected at 6.7%, contrasting with an expected drop to 6.6% and unchanged from August due to rising oil prices offsetting downward pressures from food costs. The hotter-than-expected data release saw the pound falling 0.36% to $1.2139 against a stronger dollar, with $1.21 paving the way to $1.2050. $1.2184 may act as resistance, as it was seen as keeping the possibility of another hike alive. Meanwhile, a leading think tank suggested that the BOE raise the inflation target from 2% to 3% to ease the financial burden.</p>
<h2>Australian Jobs Miss Weigh on Aussie, Back to 63 Cents</h2>
<p>Australia’s employment rose less than the 20K expected in September, adding only 6.7K jobs compared to 63K in August. However, the jobless rate improved to 3.6% versus the predicted 3.7% as fewer people sought work. The Australian dollar slipped from the signs of a cooling labour market and a firmer greenback, down over 0.50% at the time of writing to 63 cents. Losing the round support would expose 0.6270, with resistance seen at 0.6336.</p>
<h2>On The Docket</h2>
<ul>
<li>Initial Jobless Claims</li>
<li>Philly Fed Manufacturing Index</li>
<li>Fed Jefferson Speech</li>
<li>Existing Home Sales</li>
<li>Fed Chair Powell Speech</li>
<li>Fed Goolsbee Speech</li>
<li>Fed Barr Speech</li>
<li>Fed Bostic Speech</li>
</ul>
<h2>Fx 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.54% and 0.46% lower</li>
<li>Euro 0.02% lower, Pound down by 0.13%</li>
<li>Loonie and Franc 0.11% and 0.03% down</li>
<li>Japanese yen higher up at +0.08%</li>
<li>Gold 0.46% lower, Silver down by -0.26%</li>
<li>Crude and brent down by 0.21% and 0.44%</li>
<li>Natural gas up by 0.59%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-19-10-2023-26374/">JASPER’S MARKET SQUAWK 19-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>