JASPER’S MARKET SQUAWK 30-11-2022

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JASPER'S MARKET SQUAWK 30-11-2022

Dollar supported by Amazon’s debt deal

U.S. yields rose on Tuesday ahead of the Fed Chair’s speech and the release of November jobs data as investors digested the details of Amazon’s corporate debt deal.

Jerome Powell is expected to provide needed details on the Fed’s plans and whether it gradually tightens monetary policy, while the jobs report is expected to show that the U.S. economy creates jobs at a solid pace.

Key factors for today:

• U.S. yields move higher on the back of debt deals


• Franc and Yen were the biggest losers after the dollar’s bump


• Oil continues its ascend on the back of production-cut narratives


• China protests persist, weighing on sentiment


• German CPI shows a welcomed surprise

USD up on higher corporate debt

A series of blue chip companies issued debt on Tuesday, drawing interest away from Treasuries and supporting interest rates in the U.S. The largest issuer was Amazon, which dragged the tech sector, contributing to underperformance in equities.

USD/CAD and USD/CHF posted a 3rd and 4th straight session of gains after closing 0.64% and 0.56% higher. The former might head to $1.37 next unless it slides below $1.35, whereas the latter has resistance at CHF 0.9590 and a floor at CHF 0.9487.

Oil 3.10% higher after API, production cuts narrative

A large draw on U.S. stockpiles reported by API and no formal denial that OPEC+ was considering another production cut at its meeting scheduled for the weekend helped support crude prices. Press reports suggested that OPEC+ was “likely” to maintain its current policy.

WTI found stiff resistance at $80.00/bbl, with its breach leading the way towards $81.60. $77.00/bbl remains critical support. It did, however, rise from down there.

Asian indices soar as China looks into loosening restrictions

China’s Health Authority announced it would continue to “fine tune” covid policy, saying local authorities must respond to “reasonable” resident requests. Protests continued across several cities, in any case.

Offshore yuan moved higher as expectations of a faster end to covid restrictions outweighed disappointing PMI data. Hang Seng and Shanghai indices soared 3.89% and 2.27%.

German CPI lower than expected

First look at German November CPI came in at an annual rate of 10.0%, below the expected 10.4%. Meanwhile, E.U. nations remain polarised on the gas price cap, with no progress in talks as countries can’t agree on a price.

EUR/USD was little changed but fell 0.65% from its intraday peak yesterday, forming a decent support above $1.03. Failing to hold the line opens the door to $1.0240.

Movers/shakers

• Apollo Endosurgery +68% after agreeing to be acquired by Boston Scientific at $10/shr


• GEO Group +16% following analyst upgrade citing growth in electronic monitoring segment and potential for increased demand from ICE following the end of Title 42 next month


• Arrowhead ARWR +7% despite financials disappointing expectations, but positive comments on progress in trials supported investor optimism


• Novocure +7% following analyst upgrade noting optimism about the outcome of the LUNAR trial, as well as optimistic about results in ovarian and brain cancer trials


• AMC Networks -5% after CEO steps down just three months into her tenure

On the docket

• German unemployed rate


• French, Italian and E.A. inflation


• US GDP (2nd estimate), JOLTS openings and Home Sales


• EIA weekly inventory report


• Fed’s Cook and Powell speak

The post JASPER’S MARKET SQUAWK 30-11-2022 appeared first on Key To Markets Blog.

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