JASPER’S MARKET SQUAWK 20-10-2023

<h2>Powell Revamps Higher-For-Longer Narrative</h2>
<p>Stocks tumbled, and the dollar index closed lower as investors digested the Fed Chair&#8217;s remarks on keeping rates higher for longer to help bring stubborn inflation down. The 10-2 curve steepened as the 2-year dropped to 5.15% amidst cues that the Fed will hold rates unchanged in November.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-26389 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-2-1.png" alt="" width="1913" height="912" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-2-1.png 1913w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-2-1-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-2-1-1024×488.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-2-1-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-2-1-1536×732.png 1536w" sizes="(max-width: 1913px) 100vw, 1913px" /></p>
<p><strong>Chart: EURUSD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Powell&#8217;s Remarks Sends Stocks Tumbling and the Dollar Index Lower</li>
<li>Fed Chair Signals November Pause, Investors Sell Short-Term Yields</li>
<li>Oil Prices Surge on Rising Mid-East Tensions, WTI Reverses Venezuelan Losses</li>
<li>Poll Shows ECB Done Hiking, No Cuts Expected Soon, Euro Trades Higher</li>
<li>UK Consumer Confidence Drops Amid Cost-of-Living Crisis</li>
<li>Netflix Reports Record Subscriber Growth, Plans Price Increase</li>
</ul>
<h2>JP Message: Hold in November, But Higher For Longer</h2>
<p>Fed Chair Jerome Powell suggested in his address at the Economic Club of New York that rising long-term yields could substitute for another hike if sustained and signalled a November (the short-term) pause as the Committee sought to proceed &#8220;carefully&#8221;. However, he also said that policy is not &#8220;too tight&#8221; to ease inflation while economic data show resilience and geopolitical risk weigh in. The dollar dropped as investors sold the shorter 2-year yield. Meanwhile, jobless claims also dropped from 212K expected to 198K. USD/JPY trades shy of the highly speculative 150 level, with the following levels to watch at 150.30 and 149.46. On the other hand, gold continued to shine, adding 1.35% and exposing $2k.</p>
<h2>WTI Reverses Venezuelan Losses on Rising Mid-East Tensions</h2>
<p>Oil prices surged near $90 a barrel after reports of a US Navy warship intercepting three missiles and drones launched by Houthi rebels near Yemen. Oil had been under pressure from the easing of sanctions against Venezuela and had fallen to $85.50 mid-session but pulled off a solid reversal to end the session over 1% higher. Meanwhile, contrasting reports from the International Energy Agency (IEA) and the Energy Information Administration (EIA) left traders uncertain about the oil supply.</p>
<h2>Poll Shows ECB is Done Hiking, No Cuts Any Time Soon</h2>
<p>A little over 40 economists polled by Reuters believe the first easing move by the ECB will come before Chief Christine Lagarde and the Governing Council meet in July 2024, as they don&#8217;t expect inflation to reach the ECB target until at least Q3 2025. The rest believe a cut will come after July. All 85 economists polled agreed that the ECB is done hiking. Euro traded 0.44% higher against the greenback on Thursday but failed to reclaim the $1.06 barrier, with the risk of falling back to $1.0536 increased. $1.0640 is expected resistance ahead.</p>
<h2>UK Consumer Confidence Drops Due to Cost-Of-Living Crisis</h2>
<p>UK’s GfK Consumer Confidence index dropped to -30 in October, a substantial decrease from September&#8217;s -21 and lower than the consensus estimate of -20, primarily impacted by the cost-of-living crisis and lack of sufficient funds. The willingness of households to make significant purchases also declined, which is a concern for retailers in the lead-up to Christmas. The pound has been under pressure from sticky inflation but managed to flatten out Thursday, ranging between $1.2090 and $1.2130.</p>
<h2>Netflix Plans to Increase Prices After 14% Share Price Spike</h2>
<p>Netflix reported its best quarter for subscriber growth in years, adding 8.76M subscribers in Q3 as the crackdown on password-sharing did not have a negative impact, and the rollout of paid sharing has been a success. Netflix said it plans to increase prices on its most expensive US, UK, and France subscription plans. The stock price of Netflix was seen soaring from $350 a share to a close of $401, leaving support behind at $388 and marching towards $420 next.</p>
<h2>On The Docket</h2>
<ul>
<li>GB Retail Sales</li>
<li>CA Retail Sales</li>
<li>ECB McCaul Speech</li>
<li>Fed Harker Speech</li>
<li>Fed Mester Speech</li>
<li>Financial Stability Report</li>
<li>China FDI YoY</li>
</ul>
<h2>Fx 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie down 0.17%, Kiwi 0.30% in red</li>
<li>Euro and British Pound negative at -0.07%</li>
<li>Loonie 0.05% up, while Franc 0.15% lower</li>
<li>Japanese yen lower down at -0.04%</li>
<li>Gold and Silver up by 0.48% and 0.43%</li>
<li>Crude and Brent 1.08% and 0.9% higher</li>
<li>Natural gas lower down at -0.64%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-20-10-2023-26388/">JASPER’S MARKET SQUAWK 20-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>