GOLD: Gold Higher Ahead Of US PPI Data

The TYU5 range has been 111-25+ to 111-29+ during the Asia-Pacific session. It last changed hands at 111-29, up 0-02+ from the previous close. 

• The 10-year yield had a powerful move lower in reaction to the NFP data, breaking below its 4.30% pivot within the wider range 4.10% - 4.65%. This now turns momentum lower in yields and you could expect buyers of treasuries on bounces back towards 4.30/35% now looking to initially test the 4.10% area. 
• Bob Elliott on X: “Used car prices have been a big negative on CPI for the last 3m. A notable difference from the broad trend of underlying used car prices going from a significant disinflationary pressure to a modestly inflationary one over the last year or so.”

• MNI DATA - Tuesday’s CPI report headlines the US economic calendar with analysts expecting core CPI inflation to gain momentum in July as the acceleration in core goods inflation continues. We’re starting to get into larger tariff impacts on core goods but the largest could be reserved for Aug-Sep by some estimates. We are currently tracking unrounded core CPI estimates at around 0.32% M/M after the 0.23% in June at what would be the strongest M/M print since January.

  Fig 1: 10-Year US Yield 2H Chart

  

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

• China's bond futures have begun the week with falls in Monday's morning session.  
• After finishing last week up by +0.16, the 10Yr bond future has given all of that back in this morning's session, falling -0.16 to 108.45.
• Having trade last week above the 20-day EMA (of 108.56) the sell off this morning sees the 10Yr track below all major moving averages.  

• The 2-year future is lower by -0.01 at 102.35, having traded near to the 20-day EMA of 102.37 before turning lower again.  
• The 10YR Government bond has seen yields climb +1.5bp to 1.71% 

A leading commodities expert shares her view on China's supply reforms. 
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