JASPER’S MARKET SQUAWK 27-10-2023

<h2>Soft Landing Narrative Gains Traction</h2>
<p>Equities tracked lower on Thursday despite favourable conditions for a rebound with better-than-expected GDP growth, signs of cooling inflation and falling yields, as investors focused on META’s earnings. US Treasury Secretary Janet Yellen indicated a soft landing following the upbeat figures.</p>
<p><strong><img decoding="async" loading="lazy" class="aligncenter wp-image-26593 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-4.png" alt="" width="1916" height="918" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-4.png 1916w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-4-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-4-1024×491.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-4-768×368.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/10/Untitled-design-4-1536×736.png 1536w" sizes="(max-width: 1916px) 100vw, 1916px" /></strong></p>
<p><strong>Chart: GOLD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Investors Focus on Earnings Amidst Growing US GDP and Falling Yields</li>
<li>US GDP and PCE Data Conflicts with Investor Sentiment, Sending Mixed Signals</li>
<li>ECB Holds Interest Rates Steady, but Inflation Concerns May Prompt Action</li>
<li>Yen Hits 1-Year Low Against Dollar, Japan’s Inflation Exceeds Expectations</li>
<li>Chinese Industrial Profits Surge in Q3, Supporting Economic Stabilisation</li>
</ul>
<h2>Investors Scratching Head After US GDP and PCE Data</h2>
<p>Third-quarter US GDP showed the economy growing at its fastest pace in nearly two years at 4.9%, bolstering the case for hiking. But futures data suggested the November case deteriorated from 29% to 18% amidst a larger drop in Core quarterly PCE inflation and easing job markets. Yellen dismissed suggestions that higher bond yields may be due to worries about record deficit or a recession, but investors remain wary given high rates and signs of an economic slowdown.​ The dollar index moved higher until yields fell to 4.849%, closing the session mixed. 106.91 and 106.33 remain in focus.</p>
<h2>ECB Holds But Leaves Door Open Due to Persistent Inflation</h2>
<p>The ECB left interest rates and PEPP reinvestments unchanged but said inflation data pointed to prices slowing down. ECB’s President Cristine Lagarde said not at peak rates yet. With inflation at high levels, though, and energy prices rising due to the conflict in the Middle East, the ECB may be forced to take more aggressive action if pressures do not ease. The euro was little changed against the dollar at 1.0565, with support at 1.0523 and resistance near 1.06.</p>
<h2>Yen to 1-Year Low Against Dollar, Japan’s Inflation Upbeat</h2>
<p>Core inflation in Tokyo rose more than expected in October, reaching 2.7% year over year compared to forecasts of 2.5%, suggesting price pressures could keep the BOJ on its ultra-loose path. The so-called “core-core” rose 3.8% in October, showing that price increases are becoming more ingrained. The yen had hit a fresh 1-year low against the dollar on Thursday past 150.80, which has raised concerns about possible intervention. Friday appears less volatile, with expected support at yesterday’s low of 149.88.</p>
<h2>China Industrial Profits Bolstered by Supportive Measures</h2>
<p>Chinese industrial profits recovered quarter by quarter and swung to a 7.7% growth in the third quarter, with profits at Chinese industrial firms adding to signs of an economic stabilisation from recent policy measures from the government. However, the struggling property sector continues to weigh on the broader economy and corporate earnings. The better data may be partly supporting gold prices early Friday towards Thursday’s peak of $1993 an ounce, adding to the chance of a 3-day streak unless $1984 gives in, exposing $1979 and $1971/oz.</p>
<h2>On The Docket</h2>
<ul>
<li>FR Consumer Confidence</li>
<li>ES GDP Growth Rate</li>
<li>ECB Survey of Professional Forecasters</li>
<li>US Core PCE Price Index</li>
<li>Personal Income</li>
<li>Personal Spending</li>
<li>PCE Price Index</li>
<li>Fed Barr Speech</li>
<li>Michigan Consumer Sentiment</li>
<li>European Council Meeting</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie up by 0.30%, Kiwi at 0.03% only</li>
<li>Euro 0.04% up, Pound higher by 0.04%</li>
<li>Loonie 0.16% in green, Franc muted</li>
<li>Japanese yen 0.10% higher up</li>
<li>Gold 0.1% up, Silver leads at 0.58%</li>
<li>Crude 1.44% higher, Brent up by 1.39%</li>
<li>Natural gas in the green at +2.06%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/market-analysis/jaspers-market-squawk-27-10-2023-26583/">JASPER’S MARKET SQUAWK 27-10-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>