JASPER’S MARKET SQUAWK 31-08-2023

<h2>US GDP Revision Sends Dollar Lower</h2>
<p>Gold advanced on the back of a weaker dollar after US data pointed to slowing labour growth, while hotter inflation in Europe drove yields higher, bolstering the euro.</p>
<p><img decoding="async" fetchpriority="high" class="alignnone wp-image-25314 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-78.png" alt="" width="1912" height="914" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-78.png 1912w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-78-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-78-1024×490.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-78-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-78-1536×734.png 1536w" sizes="(max-width: 1912px) 100vw, 1912px" /><em><strong>Chart: XAUUSD</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Gold and Euro Gain Momentum Following US GDP Revision</li>
<li>ADP Below Expectations, Adds to Recent Job Slowdown Narrative</li>
<li>EIA Confirms Crude Drawdown, But WTI Remains Steady</li>
<li>Euro Up From Hot CPIs, Increasing ECB’s Hike Chances to Hike</li>
<li>UK Businesses Boost Cable to 3-Day Winning Streak on Increased</li>
<li>Japan’s Industrial Production Slumps, Sending USD/JPY Higher</li>
</ul>
<h2>Gold Records 3rd Day of Gains After Supporting Data</h2>
<p>August ADP employment change was below expectations at 177K compared to the 195K forecast, adding to the latest reports on slowing job growth. Moreover, preliminary Q2 GDP was revised lower to 2.1% from 2.4%, matching the narrative that the Fed might not go through with another rate hike. The run-up to $1950 an ounce failed for a few cents but brought $1955 into the spotlight. Expected support lies at the 50-day SMA near $1930/oz.</p>
<h2>DOE Confirms Massive Drawdown, WTI Barely Moves</h2>
<p>The DOE reported that crude inventories saw a -10.6M bbl drawdown, compared to the -2M bbl expected, with consumer demand for energy exceeding expectations. The Hurricane in the Gulf caused production shut-ins, and the SPR grew by 0.6M bbls, but WTI barely felt the impact. Bulls remain in control above the $80 handle a barrel, with the door to $82.85 still open.</p>
<h2>EA CPIs Above Expectations, Supporting Euro</h2>
<p>Germany’s preliminary CPI for August came in at 6.1% compared to the 6.0% forecast, whereas Spain’s also rose by 2.6% compared to the 2.5% expected, the highest rate since May. Ireland’s CPI was also above expectations. Yields in Europe ticked higher following the data releases, supporting the euro as inflation pressure increases the chances that the ECB keeps hiking. In tandem with gold’s streak, EUR/USD advanced above $1.09 again, eying the 50-day SMA near $1.09720 next so long as $1.0880 holds firm.</p>
<h2>UK Businesses Help Cable Record 3-Day Winning Streak</h2>
<p>The Lloyds business barometer jumped to 41 from 31 prior, hitting the highest since February 2022 following more robust UK retail sales and optimism that rates might be peaking. However, UK mortgage approvals fell to 49.4 compared to the 51.0K expected, below the 54.6K prior and the average of 60K, which is generally seen as consistent with price stability. Cable was upbeat on Wednesday, partially due to a softer dollar, with the support at $1.27 playing a significant role in short-term price action. $1.2780 can be seen as resistance and $1.2668 as support.</p>
<h2>Japan Industrial Production Sends USD/JPY Up</h2>
<p>Preliminary July industrial production in Japan was reported at -2.0% compared to -1.4% expected. The government cut its assessment of the industrial output, seeing demand falling domestically and abroad and production weak unless China recovers. Despite a weaker dollar, USD/JPY recorded a slight gain above 146, where it remains early Thursday. 145 is round support lower, with higher levels at 147.</p>
<h2>On The Docket</h2>
<ul>
<li>FR Inflation and GDP</li>
<li>ECB Schnabel Speech</li>
<li>BOE Pill Speech</li>
<li>DE Unemployment</li>
<li>EA Inflation and Unemployment</li>
<li>IT Inflation</li>
<li>ECB Meeting Accounts</li>
<li>PCE Price Index</li>
<li>Personal Spending and Income</li>
<li>Initial Jobless Claims</li>
<li>Fed Collins Speech</li>
<li>ES Consumer Confidence</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.12% and 0.07% up</li>
<li>Euro and Cable 0.04% and 0.02% down</li>
<li>Yen up by 0.17% lower, Swissy unchanged</li>
<li>Loonie dropped by a mere 0.04%</li>
<li>Gold down by 0.05%, Silver at -0.65%</li>
<li>Crude and Brent barely moved</li>
<li>Natural gas 0.25% lower</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-market-squawk-31-08-2023-25313/">JASPER’S MARKET SQUAWK 31-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>