JASPER’S MARKET SQUAWK 27-07-2023

<h2>Markets Mixed, Discount Any Fed Hawkishness</h2>
<p>DJIA rose for the 13th consecutive day, trying for a record number of straight gains, while tech shares were under pressure as Fed provided no clear signs on future hikes. The dollar got weaker, supporting gold and majors higher.</p>
<p><img decoding="async" loading="lazy" class="alignnone size-full wp-image-24612" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-4.png" alt="" width="1915" height="914" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-4.png 1915w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-4-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-4-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-4-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Untitled-design-4-1536×733.png 1536w" sizes="(max-width: 1915px) 100vw, 1915px" /></p>
<p>Chart: Gold</p>
<h2>Key Factors For Today</h2>
<ul>
<li>JP’s lack of conviction weighs down on the dollar</li>
<li>Australia export prices plummet, potential impacting Aussie</li>
<li>BOC minutes reveal caution about overdoing rate hikes</li>
<li>France consumer confidence contracts deeper ahead of ECB rate decision</li>
</ul>
<h2>JP Lacks Convinction, Drags on Dollar</h2>
<p>The Fed raised by a quarter point, reaching the highest rate in 22 years and kept the possibility of more hikes open, albeit data-dependent. The meeting indicated that the economy is growing slightly faster than before, with FOMC members expecting no recession. Powell’s statement didn’t include any meaningful changes as the Chair refused to provide indications for how likely a hike was at the next meeting. Yields moved lower in the aftermath, dragging on the dollar, as the consensus of traders does not expect any more hikes this year. Gold rose 0.39% on the day, reaching a high of $1979/oz in some instance, with support expected at $1965/oz. $1987 remains the peak bulls could extend gains to.</p>
<h2>Australia Export Prices Fall, Potentially Influencing Aussie</h2>
<p>Q2 export prices from Australia saw the most significant drop since 2009, primarily due to reduced global energy demand. The index fell 8.5% compared to a decline of 6.7% expected. Import prices were in line with expectations of -0.8%. The PMs of Australia and New Zealand held a joint press conference to express concern over a security agreement between China and the Solomon Islands. Aussie was seen trading lower yesterday as it lost 0.50% but joined the bullish side early Thursday, breaking 68 cents and leaving support at $0.6757 behind.</p>
<h2>BOC Minutes: Caution About Overdoing Hikes</h2>
<p>The BOC’s minutes from the last meeting showed the bank discussed a more restrictive path ahead at the previous meeting, where it hiked by 25bps. However, the BOC also cautioned about not “overdoing” rate hikes and would weigh the data at each meeting. USD/CAD was back above $1.32 at $1.3240 on Wednesday, but bears have already retested the session low at $1.3163, exposing $1.3146 next.</p>
<h2>France Consumer Confidence Disappoints Ahead of ECB</h2>
<p>French consumer confidence slipped further into contraction at 85 compared to 86 expected, affirming a narrative that the shared economy is facing challenges ahead of the ECB rate decision on Thursday, where another 25bps of tightening is desired. EUR/USD was mainly affected by the dollar yesterday, with bulls trying to reclaim $1.11; however, only managed to retest instead. $1.1050 and $1.1015 are expected supports lower down, with resistance past the handle seen at $1.1173.</p>
<h2>On The Docket</h2>
<ul>
<li>CBI Distributive Trades</li>
<li>ECB Interest Rate Decision</li>
<li>GDP Growth Rate</li>
<li>Initial Jobless Claims</li>
<li>ECB Press Conference</li>
<li>Pending Home Sales</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi each 0.52% higher</li>
<li>Euro 0.06% up, pound by 0.04%</li>
<li>Yen flat, Swissy 0.03% higher</li>
<li>Loonie up by 0.18%</li>
<li>Gold 0.32% higher, but Silver up by 0.78%</li>
<li>Crude and brent up by 1.03 and 0.87%</li>
<li>Natural gas down by 0.48%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-27-07-2023-24608/">JASPER’S MARKET SQUAWK 27-07-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>