JASPER’S MARKETS SQUAWK 28-08-2023

<h2>Jackson Hole Leaves Hawkish Tone</h2>
<p>The dollar rose and risk slumped after Jackson Hole speakers’ hawkish tone, but Asia tilted up in early Monday trading after a flurry of support from the Chinese government.</p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-25249 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-74.png" alt="" width="1750" height="836" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-74.png 1750w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-74-300×143.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-74-1024×489.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-74-768×367.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/08/Untitled-design-74-1536×734.png 1536w" sizes="(max-width: 1750px) 100vw, 1750px" /><em><strong>Chart: XWTI</strong></em></p>
<h2>Key Factors for Today</h2>
<ul>
<li>Jackson Hole Leaves Hawkish Tone, Dollar Rises and Risk Slumps</li>
<li>Asia Higher Early Monday as Chinese Government Announces Support</li>
<li>WTI Receives 1.45% Boost from Refinery Fire Despite Hawkish Sentiment</li>
<li>Germany Barely Out of Recession, Eurodollar Volatile But Ends Lower</li>
<li>Aussie Survives 64-Cents Drop after China and Positive Retail Sales</li>
</ul>
<h2>JP Hawkish, Dollar to June Levels After 6-Week Streak</h2>
<p>Fed Chair’s speech was perceived to be more hawkish than dovish as Powell did not mention cuts nor signalled a change in the short-term rates outlook. He noted that PCE continues to decline but reiterated calls for another hike this year, albeit stressed that the Fed would proceed carefully. Futures markets priced in around a 50% chance of a hike until year’s end, in line with the projections before the speech. The dollar index recorded its sixth week of consecutive gains on Friday, rising to a June high past 104 but still under 104.52. 103.60 is expected support.</p>
<h2>China Props Up Asia, Nikkei Adds to Friday’s Gains</h2>
<p>The Chinese government announced that it would lower the stamp duty on stock trades, the first move since 2008, and committed to reducing the number of IPOs. China’s Securities Regulator CSRC reduced margin requirements for trading. The government also announced changes to mortgage rules to facilitate first-time home ownership to support the housing sector. Nikkei saw an over 0.80% rise early Monday, continuing the run higher after Friday’s gain with an aim at 32300.</p>
<h2>WTI Receives 1.45% Boost from Louisiana Refinery Fire</h2>
<p>Despite initially dropping amidst hawkishness from JHS, US crude futures finished Friday 1.45% higher at $79.95 a barrel but still ended the weekly lower. Crude rose due to a fire at Marathon Petroleum’s oil refinery in Louisiana, which increased worries around global fuel inventories. Under $80, however, WTI might remain pressured, with the next support at $79. Taking over the round level may see a run up to $81.40 a barrel.</p>
<h2>Germany Barely Out of Recession, Lagarde Hawkish</h2>
<p>German final Q2 GDP figure was confirmed at 0% growth on Friday, moving the Eurozone’s largest economy out of technical recession – barely. ECB President Christine Lagarde’s speech at Jackson Hole steered clear of any mention of policy at the upcoming meetings, leaving investors with her usual “too high for too long” play on inflation unchanged. The eurodollar experienced a volatile session but ended lower on the back of a stronger dollar, albeit largely unchanged. Euro bulls are making an early attempt to maintain control of the $1.08 support, with $1.0766 and $1.0842 driving breaks outside the range.</p>
<h2>Aussie Bounces at 64 cents after China, Retail Sales</h2>
<p>July Retail sales figures showed a surprise growth of 0.5% compared to 0.3% expected. This helped give the Aussie an extra push away from 64 cents as it reacted positively to the China stimulus and expectation of increased demand. AUD/USD trades 0.45% higher on the day but remains below $0.6440.</p>
<h2>On The Docket</h2>
<ul>
<li>Dallas Fed Manufacturing</li>
<li>Japan Unemployment Rate</li>
</ul>
<h2>FX 1-Day Relative Performance (USD)</h2>
<ul>
<li>Aussie and Kiwi 0.47% and 0.27% lower</li>
<li>Euro 0.4% up, Cable higher at +0.21%</li>
<li>Yenunchnaged while Swissy 0.16% up</li>
<li>Loonie also up, at plus 0.10%</li>
<li>Gold 0.14% up, while Silver 0.04% down</li>
<li>Crude and Brent 0.06% and 0.11% lower</li>
<li>Natural gas is up substantially, at +3.05%</li>
</ul>
<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/jaspers-markets-squawk-28-08-2023-25245/">JASPER’S MARKETS SQUAWK 28-08-2023</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>