JASPER’S MARKET SQUAWK 24-08-2023

<h2>PMIs Show Recession Still on Table</h2>
<p>US and Eurozone PMIs came in surprisingly weak, with the highly anticipated Nvidia earnings topping estimates. The dollar drifted lower, with gold up and crude closing lower despite a late-session rebound.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25189 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-1949-×-839px.png" alt="" width="1949" height="839" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-1949-×-839px.png 1949w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-1949-×-839px-300×129.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-1949-×-839px-1024×441.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-1949-×-839px-768×331.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-1949-×-839px-1536×661.png 1536w" sizes="(max-width: 1949px) 100vw, 1949px" /></p>
<p>Chart: WTI</p>
<h2>Key Factors for Today</h2>
<ul>
<li>PMIs Show Recession Still on Table with Surprisingly Weak US and Eurozone Data</li>
<li>Manufacturing PMI Contraction Raises Recession Worries, Gold Soars to $1915/oz</li>
<li>Eurozone Services PMI Falls into Contraction, German Manufacturing Improves</li>
<li>WTI Marks 3-Day Losing Streak Despite Larger-than-Expected Stock Drawdown</li>
<li>Slowing Capital Flows in Japan, But USD/JPY Falls on Weaker Dollar</li>
</ul>
<h2>Gold Soars as Manufacturing PMI Raises Recession Worries</h2>
<p>August S&amp;P Global Manufacturing PMI Flashunexpectedly fell further into contraction to 47.0 compared to 49.0 expected, with a decline in new orders supporting the hard landing narrative. US treasury yields weakened across the curve in a sign of increased demand for safe havens. Gold soared 0.95% to $1915/oz, marking a 3-day winning streak and leaving behind support at $1900/oz handle.</p>
<h2>Eurozone Services Fall PMI into Contraction</h2>
<p>Weighing on sentiment in Europe was the surprise downturn in HCOB Services PMI Flash in the middle of the summer, falling to contraction for the first time in 8 months at 48.3 compared to 50.5 expected. German services also fell into contraction, but manufacturing was better than expected at 43.7 compared to the improved 42.7 expected, although remaining in contraction for the 14th consecutive month. EUR/USD crawled 0.16% higher at $1.0863, largely due to a weaker dollar, with expected support at $1.0833 and a potential ceiling at $1.09.</p>
<h2>WTI Marks 3-Day Losing Streak Despite Stock Drawdown</h2>
<p>The DOE’s report on inventories aligned with API’s report yesterday, showing inventories fell by -6.1M bbl compared to -2.5M bbl expected by analysts. US exports were flat, and the SPR grew by 500K bbl. WTI had been under pressure through the day due to economic worries but bounced on the larger than-anticipated drawdown, although failed to recover into the green, closing 1.30% lower and in the red for a third session. $76.85/oz is near-term support under $77.70/oz, with an advance opening up speculation for $80/bbl.</p>
<h2>Japan Sees Slowing Capital Flows, But USD/JPY Falls</h2>
<p>Net weekly portfolio flows to Japan slowed to ¥973.3B from ¥1.4T prior, with equity outflows outpacing bond inflows, adding pressure to a weakening yen with USD/JPY down 0.74% on the bk of a softer dollar. ¥145.90 is seen as expected resistance in a potential run-up higher, while support is settled by the ¥144 handle in the event of drops under ¥144.52.</p>
<h2>On The Docket</h2>
<ul>
<li>CBI Distributive Trades</li>
<li>TCMB Interest Rate Decision</li>
<li>Durable Goods Orders</li>
<li>Initial Jobless Claims</li>
<li>Chicago Fed National Activity Index</li>
<li>Gfk Consumer Confidence</li>
<li>BRICS Summit</li>
<li>Jackson Hole Symposium</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie 0.01 up, while Kiwi 0.18% lower</li>
<li>Euro 0.08% higher, Pound 0.03% up</li>
<li>Yen 0.22% lower, Swissy 0.16% higher</li>
<li>Loonie 0.05% higher</li>
<li>Gold 0.1% up, while Silver 0.15% down</li>
<li>Crude and Brent 0.11% and 0.05% down</li>
<li>Natural gas down by 1.24%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-24-08-2023-25168/">JASPER’S MARKET SQUAWK 24-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>