JASPER’S MARKET SQUAWK 29-09-2023

<h2>Markets Reverse in Sign of Respite</h2>
<p>US equities got a boost Thursday as concerns about a looming government shutdown and ongoing strikes dampened the economy’s outlook, which in return ended the dollar’s rally. Crude also fell, alleviating fears of higher rates from rising inflation.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25997 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-7.png" alt="" width="1917" height="915" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-7.png 1917w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-7-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-7-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-7-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/09/Untitled-design-7-1536×733.png 1536w" sizes="(max-width: 1917px) 100vw, 1917px" /></p>
<p><strong>Chart: GOLD</strong></p>
<h2>Key Factors for Today</h2>
<ul>
<li>US Equities Soar as Markets Find Respite from Government Shutdown and Strikes</li>
<li>Dollar’s 4-Day Winning Streak Snapped, but Gold Prices Also Dip</li>
<li>Crude Futures Drop 2.2% Amid Speculation of Increased Saudi Crude Supply</li>
<li>Euro Area Worries Mount as CPI Data Drops Raise ECB Mistake Chances</li>
<li>BOE Aims to Reduce Market Risk with New Lending Facilities for NBFIs</li>
</ul>
<h2>Dollar Snaps 4-Day Streak Following GDP Data, But Gold Also Down</h2>
<p>The US economy maintained an expected solid pace of growth in Q2 at 2.1% (and revised higher), but the price index decelerated from 2% to 1.7%, partially easing recent calls for higher rates for longer. Concerns about a looming government shutdown and an ongoing strike by auto workers appeared to dampen the outlook for the rest of 2023, with markets anxious to confirm a less-hot data print in the Fed’s favourite inflation metric, the PCE, as the month ends to Friday’s quarterly options expiration. Thursday’s narrative killed the dollar’s 4-day rally with a meaningful drop, but gold also seemed under pressure 0.55% lower to a March low of $1865 an ounce from a spike in short-term yields. $1850 is expected support while under $1885.</p>
<h2>WTI at 1-Year+ High Before 2.20% Drop From Defence Deal Rumours</h2>
<p>Crude futures reversed more than half of Wednesday’s surge, falling by 2.2% to end at $91.75 a barrel, due to speculation that an energy component in a geopolitical deal between the US, Saudi Arabia and Israel could increase Saudi crude supply to the US. Prices reached a fresh August 2022 high before retreating past $95 a barrel, with the focus returning to the $90 handle.</p>
<h2>EU CPI Data Show Larger Drops, Increasing Worries of ECB Hike</h2>
<p>Euro Area economic sentiment improved from 91.5 forecasted to 93.3, with German inflation falling more than expected on the yearly and monthly fronts. Spanish inflation also fell more than expected, adding to worries that the ECB may go for another hike while unnecessary. The euro was left stronger on the back of a weaker dollar, rising 0.60% to $1.0565 and targeting $1.06 next. If the swing low of $1.0488 is lost, it will open up speculation for an extended leg to $1.04, with an interim stronghold at $1.045.</p>
<h2>BOE Plans to Design Lending Facilities to Reduce Market Risk</h2>
<p>The BOE plans to establish a permanent lending facility for non-bank financial institutions as concerns about the risks of rising interest rates and volatile markets to NBFIs rise. NBFIs now account for about half of all financial assets, with the bank’s attempt seen as a way to avoid the need for interventions during crises from market turmoil similar to the pandemic and the gilts crisis. The dollar put an end to cable’s 6-day losing streak, sending prices up from $1.2135 to $1.2198 and past $1.22 early Friday. Continuing higher exposes $1.2250.</p>
<h2>On The Docket</h2>
<ul>
<li>GB GDP Growth Rate</li>
<li>French Inflation</li>
<li>ECB President Lagarde Speech</li>
<li>EA Inflation Rate</li>
<li>Italian Inflation</li>
<li>Canada GDP</li>
<li>Core PCE, PCE Price Index</li>
<li>Personal Spending</li>
<li>Michigan COnsumer Sentiment</li>
<li>Fed Williams Speech</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie up by 0.49%, Kiwi spikes at +0.73%</li>
<li>Euro 0.14% up, Pound also up 0.23%</li>
<li>Yen rather unchanged, Franc 0.16% higher</li>
<li>Canadian dollar sees 0.05% advance</li>
<li>Gold 0.19% higher, Silver soars by 1.91%</li>
<li>Crude and Brent down by 0.13% and 0.18%</li>
<li>Natural gas higher up, at 1.15%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-29-09-2023-25996/">JASPER’S MARKET SQUAWK 29-09-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>