JASPER’S MARKET SQUAWK 25-09-2023

<h2>Gov Shutdown and UAW Expansion Weigh on Markets</h2>
<p>Renewed worries over a government shutdown and UAW’s strike expansion weighed on markets on Friday, sending the 10-year yield higher. It follows two sessions of risk-off, primarily driven by the Fed’s hawkish pause.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25844 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T102809.143.png" alt="" width="1916" height="918" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T102809.143.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T102809.143-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T102809.143-1024×491.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T102809.143-768×368.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-2023-09-25T102809.143-1536×736.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /><em><strong>Chart: XAUUSD</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Market Concerns Rise as Government Shutdown and UAW Expansion Loom</li>
<li>Uncertainty Boosts Dollar and Gold Amidst Funding Bill Rejection</li>
<li>German Manufacturing Shows Signs of Improvement but Remains in Contraction</li>
<li>Cable Hits 6-Month Low on Disappointing UK Services PMI Figures</li>
<li>Asian Markets Rally as China IPO Rumors Spark Risk-On Appetite</li>
</ul>
<h2>Both Dollar and Gold Higher from Raising Uncertainty</h2>
<p>House Republicans rejected Speaker Kevin McCarthy’s funding bill for the second time ahead of the looming deadline at the end of September, raising worries of a government shutdown before Congress reconvenes for a resolution on Wednesday. Along with implications from UAW’s extended strikes to 38 GM and Stellantis facilities, the dollar rose despite a mixed bag from Global PMIs; weaker services, improving Manufacturing but still in contraction. Gold also moved higher on the increasing uncertainty as the 2-year yield saw a marginal decline. The 0.30% upside ended as an inside bar, though, with an expected top at $1930 and a bottom at $1913 an ounce.</p>
<h2>German Manufacturing Improves But Still in Contraction</h2>
<p>The HCOB Manufacturing PMI improved from 39.1 expected to 39.8 but remained in contractionary territory far from the 50 threshold for over a year now. Services also experienced an uptick to 49.8, from 47.9. The Euro Area release showed Manufacturing falling from 43.5 to 43.4, but while the divergence was minimal, economists had expected a print of 44. Last month was also revised down from 43.7. Coupled with a stronger dollar, EUR/USD dropped to a new March low of $1.0615 before recoiling back some losses, closing little changed, albeit lower. Losing the swing support could instigate a move to $1.06, whereas an upside push could see prices reach a high of $1.0686.</p>
<h2>Cable to a 6-Month Low After UK Services Disappoint</h2>
<p>UK Manufacturing PMIs had a solid round of results, but Services disappointed, with the figures increasing concerns over a UK recession. Manufacturing rose from 43 (revised from 42.5) to 44.2, while economists forecasted 43.3. On the other hand, Services declined from 49.5 (still revised up from 48.7) to 47.2, when projections had shown an expectation of 49.3. Services were last as low in January 2021. They also showed a decline in private employment. Cable closed lower for the third session on Friday and to a fresh March low of $1.2235, bringing 1.2180 in focus. On the contrary, $1.23 appears as a solid resistance for those willing to bet against. Meanwhile, Retail Sales fell from 1.1% to 0.4% earlier on Friday but near forecasts of 0.5%.</p>
<h2>China IPO Rules Rumours Improve Asian Risk-On Appetite</h2>
<p>US-listed stocks witnessed a rally on Friday after reports revealed China may have considered easing rules limiting foreign ownership of publicly traded companies. Hang Seng soared 2.70% in the aftermath of the report, taking over the 18k handle, but is currently under profit-take pulbacks with 17580 as support.</p>
<h2>On The Docket</h2>
<ul>
<li>CA Housing Starts</li>
<li>NAHB Housing Market Index</li>
<li>Net Long-term TIC Flows</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi lower, by 0.31% and 0.24%</li>
<li>Euro barely down at -0.02%, Pound at +0.01%</li>
<li>Yen unchanged, Swiss Franc down by 0.15%</li>
<li>Canadian dollar 0.07% lower</li>
<li>Gold and Silver 0.21% and 0.35% lower</li>
<li>Crude and Brent higher by 0.34% and 0.46%</li>
<li>Natural gas barely lower, 0.03% in red</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-25-09-2023-25843/">JASPER’S MARKET SQUAWK 25-09-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>