JASPER’S MARKET SQUAWK 22-11-2023

<h2>Investors Disappointed by Minutes</h2>
<p>Investor enthusiasm about the possibility of ending rate hikes waned on Tuesday, pausing the recent rally and supporting the US dollar higher, as the Fed’s minutes did little to confirm the cheerful narrative.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-27202 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-10.png" alt="" width="1922" height="914" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-10.png 1922w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-10-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-10-1024×487.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-10-768×365.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/11/Template-Daily-10-1536×730.png 1536w" sizes="(max-width: 1922px) 100vw, 1922px" /></p>
<p><strong>Chart: GOLD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Investor Enthusiasm Dampened by Fed’s Caution, Gold Shines</li>
<li>Lagarde Warns Premature Victory Over Inflation Could Spell Trouble</li>
<li>UK Moves to Raise Minimum Wage Despite Inflation Fears</li>
<li>Oil Market Takes a Breather, Surplus Predicted Even With OPEC Cuts</li>
<li>Economist Poll Reveals Japan’s Monetary Policy Shift Is Near</li>
</ul>
<h2>FOMC Minutes Reveal Caution, Gold Shines</h2>
<p>The minutes from the Fed’s recent meeting showed a shift towards caution, indicating a willingness to raise only if progress in fighting inflation falters. Unlike the prior meeting in September, where a majority of policymakers judged that another rate hike would be needed, this time, there was a unanimous agreement to keep rates at the current restrictive setting. Amidst speculation that the Fed has at least ended its hiking campaign, gold emerged as a winner on Tuesday, rising to a 3-week high of $2007 and opening up $2020 next unless we witness an attempt at $1985.</p>
<h2>Lagarde Persist on Premature Win Over Inflation</h2>
<p>European Central Bank (ECB) President Christine Lagarde warned against drawing premature conclusions about falling inflation and stressed the risks from a potential rapid wage growth. Meanwhile, Germany is tightening its purse strings by freezing new spending commitments as the nation faces deepening budget woes, highlighting the need for fiscal diplomacy. EURUSD was seen trading above $1.09 last after failing to get past $1.0965, with lower territories exposing $1.085.</p>
<h2>UK Plans to Boost Minimum Wage Despite Higher than CPI</h2>
<p>Britain plans to raise its minimum wage by 9.8% to £11.44 per hour starting April 2024 despite BOE Gov Andrew Bailey’s warning that wage growth is well above inflation. It comes on the heels of a mid-year Autumn Statement today, where Finance Minister Jeremy Hunt is expected to reduce taxation. The decision faces concerns about potential challenges from increased wage costs. Meanwhile, BOE’s rate-setter Catherine Mann warned of tighter policy. The British Pound rose for a 3rd trading session in a row, surpassing $1.25 and off to a 7-week high of $1.2560. Conditions are likely to remain favourable while above $1.2470.</p>
<h2>WTI Halts Rally On Mixed Signals, API</h2>
<p>The IEA said it expects a market surplus even if OPEC decides to extend its production cuts, tempering further upside in oil prices. It follows recent speculation that Saudi Arabia might extend its voluntary cut of 1M bpd into 2024. The API also reported a net build of 21M barrels in oil inventories so far this year, adding 9.054M only yesterday, surpassing analysts’ expectations of 1.467M. A hostage exchange deal between Israel and Hamas influenced crude futures initially, but oil appears to be facing some resistance at around $78 a barrel. A range breakout outside of the $75 and $80 levels might do the trick.</p>
<h2>Economists Expect BOJ to Exit NIRP by Next Year</h2>
<p>According to a Reuters poll, a major shift in Japan’s monetary policy is brewing. Over 80% of economists believe the BOJ will end its negative interest rate policy (NIRP) by 2024. Views vary on the timeline for the change, with a majority doubting Japan’s ability to achieve the projected 1.2% boost in GDP growth. The yen was seen weakening yesterday to put an end to its 3-day streak at ¥147.15, with the next resistance at ¥149.55.</p>
<h2>On The Docket</h2>
<ul>
<li>RBA Bullock Speech</li>
<li>CBI Industrial Trends Orders</li>
<li>MBA 30-Year Mortgage Rate</li>
<li>Durable Goods Orders</li>
<li>Initial Jobless Claims</li>
<li>Michigan Consumer Sentiment</li>
<li>EIA Crude Oil Stocks Change</li>
<li>BOC Gov Macklem Speech</li>
<li>UK Autumn Statement</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.3% lower each</li>
<li>Euro 0.07% down, Pound at -0.13%</li>
<li>Loonie 0.13% in red, Frank at -0.05%</li>
<li>Japanese yen 0.35% in the red zone</li>
<li>Gold muted, Silver 0.27% lower</li>
<li>Crude and Brent down by 0.3%</li>
<li>Natural gas up by mere 0.11%</li>
</ul>
<p>The post <a href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-22-11-2023-27198/">JASPER’S MARKET SQUAWK 22-11-2023</a> appeared first on <a href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>