GOLD: Bullion Range Trading Ahead Of Friday's Ukraine Meeting, Fed Speak Later

The BBDXY has had a range of 1201.78 - 1203.10 in the Asia-Pac session, it is currently trading around 1202, -0.02%. The BBDXY is consolidating its gains above the 1200 area as it awaits US CPI tonight. On the way down the BBDXY has been heavily sold every time it has challenged the 30 EMA on the Daily(See Chart Below), will the sellers again use this area to reload shorts or can the USD finally initiate some sort of a correction. CHINA GDP in Line with Targets: China's second quarter GDP YoY printed slightly above estimates at +5.2%, but down from first quarter result of +5.4%. The second quarter result keeps GDP on track with the recently announced growth target of "around 5 percent" for 2025, the same as their 2024 target.

• EUR/USD -  Asian range 1.1661 - 1.1678, Asia is currently trading 1.1675. The pair continues to see some demand towards the 1.1650 area. The price is still starting to look a little stretched in the short term and is vulnerable to any correction in the USD, first support is back towards 1.1600 then more importantly the 1.1450 area.
• GBP/USD - Asian range 1.3422 - 1.3441, Asia is currently dealing around 1.3430. Price has rejected the move higher and Bailey’s hint that bigger rate cuts are on their way if the job market deteriorates further has added further headwinds. Support seen around the 1.3350/1.3450 area, a close back below here could signal an even deeper correction. 
• USD/CNH - Asian range 7.1689 - 7.1785, the USD/CNY fix printed 7.1491, Asia is currently dealing around 7.1780. Sellers should be around on bounces while price holds below the 7.2500 area and the PBOC manages the fix lower.
• Cross asset : SPX -0.25%, Gold $3355, US 10-Year 4.33%, BBDXY 1195, Crude oil $65.67
• Data/Events : Germany ZEW Survey, EZ Zew Survey & Industrial Production, Spain CPI

Fig 1: BBDXY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

Sentiment in the tech space was buoyed by early headlines that chip/AI bellwether Nvidia would resume sale of its H20 chip to China (with US government approval). US equity futures rose, led by the Nasdaq (last up around 0.35%), while Hong Kong and China tech sensitive plays were also higher. However, as the afternoon session has progressed, we have moved away from these best levels. 

• In China, the aggregate CSI 300 index was up 0.60% at one stage, but at the lunchtime break is now -0.50% weaker. The Shanghai Composite is down 0.93%. Outside of the tech news, we also had Q2 GDP print, which was slightly better than forecast (y/y growth holding above 5%). Monthly June activity data saw Industrial production beat, but retail sales, fixed asset investment  and property indicators were weaker. Home prices also fell more than in May.
• The CSI 300 real estate index is down 2% at the break. Headlines "CHINA'S URBANISATION IS TRANSITIONING FROM HIGH-SPEED GROWTH TO STEADY DEVELOPMENT- XINHUA" RTRS, crossed a short while ago, which has likely dampened speculation of sharp policy shift in this space (like we saw in 2015 and which was also speculated on late last week). China's Vanke also reported a first half loss.
• In Hong Kong the HSI is still up 0.20%, but is also well off earlier highs. The tech sub is +0.41% at the break, but was much higher in earlier trade.
• Elsewhere, Japan markets are little changed, while the Kospi has ticked down, struggling to hold above 3200 in index terms. The Taiex is up around 0.80% and one of the better performers on the day.
• In SEA trends are fairly modest, with Philippines and Malaysia, but Thailand and Indonesia a touch higher. 

The NZD/USD had a range of 0.5968 - 0.5986 in the Asia-Pac session, going into the London open trading around 0.5975, +0.08%. Risk got a boost this morning as Nvidia posted on a blog that they had received assurances from the US Government that it would be granted licenses to resume sales of its H20 to China. NZD/USD is again probing its support just below 0.6000, lets see if it can follow through. A break below this support and the market would potentially move back towards the 0.5850/0.5900 area.

• Bloomberg - “Nvidia Corp. plans to resume sales of its H20 artificial intelligence accelerator to China, after it received assurances from the US government that it would be granted licenses, the company said in a blog post.”
• Options : Closest significant option expiries for NY cut, based on DTCC data: none. Upcoming Close Strikes : 0.5932(NZD317m July18).
• CFTC Data shows Asset Managers added slightly to their newly built longs in NZD +9229, the Leveraged community added slightly to their shorts last week -8654.
• AUD/NZD range for the session has been 1.0945 - 1.0967, currently trading 1.0950. The cross has broken out of its recent range and is now trying to push through the more pivotal 1.0950 area. Dips back to 1.0850/1.0900 should now be supported as the pair tries to build momentum to move higher. 

Fig 1: NZD/USD Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P