COMMODITIES: Crude Rebounds, Gold/Silver Pull Back Following US PPI Data

Analyst estimates for June core PCE % M/M have risen after today's CPI reading and ahead of Wednesday's PPI data. Current estimates point to a reading between 0.28-0.35% once the relevant PPI and import price data are taken into account (core PCE printed 0.18% in May), vs a pre-CPI median estimate of around 0.25% M/M.

• Recall core CPI came in at 0.23% in June, after 0.08% in May, and all estimates we've seen show PCE exceeding that.
• If the rough median 0.31% for core PCE proves correct, it would translate into a roughly 2.5% 3M annual rate (from 1.7% prior), with the 6M annual rate rising 0.2pp to 3.1%, a 3-month high. Y/Y would come in around 2.78%, a 5-month high.
• Morgan Stanley: 0.35% ("Core goods are higher in PCE than CPI because cars, which came in negative, carry a higher weight in CPI... We expect PCE health services rose 0.30%m/m, financial services and insurance at 0.69%, domestic airfares at 1.3%, and foreign travel at 0.5%.")
• Nomura: 0.35% (was 0.28% pre-CPI - note that in their CPI preview they looked for a 4.3% increase in portfolio management and investment advice prices in PPI)
• UBS: 0.32% (was 0.27% pre-CPI) - ("However, we heavily discount the translation of the CPI data into PCE prices until after the release of tomorrow's PPI data.)
• Barclays: 0.29% (was 0.25% pre-CPI)
• Goldman Sachs: 0.29% (was 0.25% pre-CPI)
• TD: 0.28%

• Oil has fallen further today, having begun its reversal on Monday as President Trump gave a 50-day deadline to Russian sanctions, easing fears of any short-term disruption.
• WTI Aug 25 is down by 0.7% at $66.5/bbl.
• OPEC expects global trade tensions to ease in the coming weeks, supporting its outlook for oil demand to remain steady.
• WTI futures maintain a bearish tone following the reversal from the June 23 high, with support to watch at $65.50, the 50-day EMA. A clear break of this level would signal scope for a deeper retracement, exposing $58.87, the May 30 low.
• Initial resistance to monitor is $71.20, the 50.0% retracement of the June 23 - 24 high-low range.
• Meanwhile, spot gold has fallen by 0.5% to $3,328/oz amid the bounce in the US dollar following today’s US CPI data.
• Despite today’s dip, ongoing trade uncertainties are expected to remain a support for gold, with analysts at City Index suggesting that the yellow metal could easily retest of even breach recent highs if trade talks deteriorate before August.
• A bull cycle in gold that started June 30 remains intact and an extension higher would expose $3,395.1, the June 23 high, and $3,451.3, the June 16 high.
• On the downside, first support to watch is $3,282.8, the July 9 low.

President Donald Trump is shortly due to speak at a roundtable focused on energy and artificial intelligence at Carnegie Mellon University in Pittsburgh. LIVESTREAM 

• CBS reports: "The Inaugural Pennsylvania Energy and Innovation Summit, organized and hosted by Republican U.S. Sen. Dave McCormick [R-PA], will also be attended by leaders of many of the country's largest energy and technology companies. McCormick is set to announce billions of dollars in new investments into energy and innovation in the state. Among them will be the construction of data centers to help provide the enormous amounts of energy needed to power AI."
• McCormick said in a statement to Axios: "President Trump has put together a bold strategy to strengthen and maintain America's AI and energy dominance," noting that the summit "is the first of its kind to convene the top CEOs and leaders from energy, AI, labor, and the world's largest sources of capital, demonstrating that Pennsylvania is ready to lead in the AI and energy revolution."
• Among the executives expected to attend, per Axios: ExxonMobil's Darren Woods, Chevron's Mike Wirth, BlackRock's Larry Fink, Palantir's Alex Karp, Anthropic's Dario Amodei, Amazon Web Services' Matt Garman, Bechtel's Brendan Bechtel, Bridgewater's Nir Bar Dea, GIC's Lim Chow Kiat (Singapore), Brookfield's Bruce Flatt, CPP Investments' John Graham and EQT's Toby Rice.