JASPER’S MARKET SQUAWK 23-10-2023

<h2>Easing Tensions Wind Down Safe-haven Bids</h2>
<p>Equities fell again on Friday despite overall good earnings reports and winding back some safe-haven bids as investors remain vigilant from rising yields and an anticipated ground invasion in Gaza. A speakerless House isn’t helping either. The 10-year kept testing 5%.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-26452 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/XTIUSD-Jasper.png" alt="" width="1913" height="912" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/XTIUSD-Jasper.png 1913w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/XTIUSD-Jasper-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/XTIUSD-Jasper-1024×488.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/XTIUSD-Jasper-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/XTIUSD-Jasper-1536×732.png 1536w" sizes="(max-width: 1913px) 100vw, 1913px" /></p>
<p><strong>Chart: WTI</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>S&amp;P 500 Faces 4-Day Losing Streak Amidst Fiscal Concerns and Hawkish Remarks</li>
<li>Oil Prices Dip as Ground Invasion into Gaza Delayed, But Uncertainty Remains</li>
<li>UK Politics and Surging Gilt Yields Impact UK’s Market Landscape</li>
<li>Chinese Yuan Under Pressure from Largest Outflows Since 2016</li>
<li>Argentinian Peso Faces Uncertainty Following Presidential Election Run-Off</li>
</ul>
<h2>S&amp;P Records 4-Day Streak Amidst Multifaceted Risks</h2>
<p>US equities fell amidst tightening financial conditions and hawkish remarks on Friday. The US government posted a 23% higher budget deficit in fiscal 2023, with interest rate debt rising to a record 879B. Meanwhile, Fed’s Bostic (2024 voter) said he expects no cuts in H1 of 2024. The S&amp;P 500 dropped over 1% in one of the biggest drops in 2023, marking a 4-day losing streak to 4250 and exposing 4200 next. Resistance can be seen near 4300as markets brace for big earrings reports.</p>
<h2>WTI Drops After Hostage Release, Delayed Ground Invasion</h2>
<p>Easing conflict influenced by the US and EU secured the release of hostages held by Hamas and allowed aid through Egypt, with oil prices declining on Israel’s decision to hold off on its ground invasion of Gaza. US oil slipped towards $88 a barrel but broke lower Monday, encouraging bets to $85.60 unless bulls reclaim $87.90/bbl. However, the US sent additional air defences to the Middle East as it fears potential regional escalation.</p>
<h2>Rising Gilt Yields and UK Politics Take Centre Stage</h2>
<p>Debt servicing costs are expected to double due to higher interest rates and inflation as the 30 and 10-year yields reached multiyear highs. Meanwhile, during his Mideast trip, Rishi Sunak received bad news of the Conservative Party’s two historic by-election losses and letters of no-confidence to Sir Graham Brady. More than 40 MPs urged him to call for a ceasefire in Gaza. The pound closed slightly higher against the dollar after rejecting $1.21, bringing $1.22 into the spotlight.</p>
<h2>Biggest Chinese Outflows Since 2016 Weigh on Yuan</h2>
<p>Chinese net outflows reached around 75B in September, the most since late 2016, driven by growing interest rate differentials, pressuring the Chinese Yuan on Friday. Chinese stocks dragged the broader Asia equity market further down early Monday, with the property sector facing woes after investigations into Foxconn Technology Group. 7.30 and 7.35 are expected to provide further clarity.</p>
<h2>Argentinian Election Run-Off Weighs on Peso</h2>
<p>Economy Minister Sergio Massa has won the first round of Argentina’s presidential election over Javier Milei, leading to a selloff in Argentina’s markets due to inflation concerns and expectations of increased government spending. Javier Milei will now face Sergio Massa in a second-round vote on November 19. His supporters had hoped for an outright victory similar to Jair Bolsonaro’s unexpected triumph in Brazil in 2018.</p>
<h2>On The Docket</h2>
<ul>
<li>Bundesbank Monthly Report</li>
<li>Chicago Fed National Activity Index</li>
<li>EA Consumer Confidence Flash</li>
<li>Judo Bank Manufacturing, Services PMI</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie up 0.04%, while Kiwi 0.01% down</li>
<li>Euro and Pound in red by 0.15% and 0.10%</li>
<li>Loonie unchanged, Franc 0.32% lower</li>
<li>Japanese yen pressured -0.08% down</li>
<li>Gold and Silver down by 0.46% and 0.44%</li>
<li>Crude and Brent 1.14% and 1.35% lower</li>
<li>Natural gas lower down by 0.86%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/market-analysis/jaspers-market-squawk-23-10-2023-26451/">JASPER’S MARKET SQUAWK 23-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>