JASPER’S MARKET SQUAWK 29-08-2023

<h2>Central Bank Outlook Leaves Markets To Drift Higher</h2>
<p>Markets moved higher in relatively light trading as traders parsed central bank commentary over the weekend. Gold rose on the dollar’s drop, with the 2-10-year yield inversion deepening, after a 2-year auction priced above 5% for the first time in 17 years. Crude rose through choppy trading.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25288 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Market-Squawk-29082023.png" alt="" width="1750" height="835" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Market-Squawk-29082023.png 1750w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Market-Squawk-29082023-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Market-Squawk-29082023-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Market-Squawk-29082023-768×366.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Market-Squawk-29082023-1536×733.png 1536w" sizes="(max-width: 1750px) 100vw, 1750px" /><em><strong>Chart: XAUUSD</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Dallas Manufacturing Index above expectations</li>
<li>ECB Officials comment on rate hike expectations</li>
<li>Another RRR cut in China is rumoured in the press</li>
<li>Australia is the best performer among major commodity currencies</li>
</ul>
<h2>Dallas Manufacturing Improves in Jackson Hole Shadow</h2>
<p>The Dallas Fed Manufacturing index improved over expectations coming in at -17.2 compared to the -21.0 forecast. The Russell 2000 was the better performer as tech and real estate weighed on the markets. Expectations that the Fed has reached peak rates are seen driving positivity in equities and weighing on the dollar. The Dollar index continued to move away from the 104.40 high, which has become resistance and trending towards support just above 103.0 around the 200 SMA area.</p>
<h2>ECB Still Worried About Inflation</h2>
<p>Following ECB President Christine Lagarde’s comments over the weekend that the shared central bank was committed to bringing down inflation, ECB official Robert Holzmann (Austria) said he expected a rate hike in September as long as there were no surprises. He also suggested that policy can be reassessed once inflation is below 4.0% (compared to 5.0% expected for August). Holzmann’s views contrasted with those of his German peers. ECB Official Joachim Nagel said he wouldn’t provide signals about rate hikes and reiterated his stance would wait for data before deciding on a rate hike in September. Said that rates may need to plateau for an extended period after reaching peak. The euro continued its rebound from the 1.0790 level against the dollar, pushing above the 200 SMA with the next resistance seen in the 1.0900 area.</p>
<h2>Chinese Press Talks About RRR Cut</h2>
<p>A report in the China Securities Journal suggested that the PBOC could cut the reserve requirement ratio again to promote liquidity. The US trade Secretary’s visit to China concluded with an agreement to form an Export Control Enforcement Exchange, a working group to improve communication and a step towards easing tensions. Gold continued its upward trajectory, leaving behind support around the 200 SM at 1913/oz, eyeing the 0.5 Fib retracement in the 1934/oz area for the next resistance.</p>
<h2>Australia Consumer Confidence Improves</h2>
<p>Aussie is once again the largest beneficiary of Chinese support, with the NZD also gaining. But better news from Australia is seen as the catalyst for its outside performance, with ANZ/Roy Morgan consumer confidence rising to 78.1 from 75.8 prior. The rebound in the AUDUSD off $0.6400 continued, solidifying the level as support after a double bottom and potentially challenging resistance in the 0.6500 region that it bounced off last week.</p>
<h2>On The Docket</h2>
<ul>
<li>German GfK Consumer Confidence</li>
<li>S&amp;P/Case-Shiller Home Price</li>
<li>JOLTs Job Openings</li>
<li>CB Consumer Confidence</li>
<li>API Crude Oil Stock Change</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi higher at 0.31% and 0.24%</li>
<li>Euro and Cable are up 0.16% and 0.22%</li>
<li>Yen and Swissy gain 0.09% and 0.12%</li>
<li>Loonie drifted up by 0.08</li>
<li>Gold and Silver advanced by 0.33% and 0.51%</li>
<li>Crude and Brent down 0.06 and 0.05%</li>
<li>Natural gas lost 0.38%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-29-08-2023-25284/">JASPER’S MARKET SQUAWK 29-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>