GOLD: Gold Higher Ahead Of US PPI Data
Gold prices are off their intraday low of $3620.47/oz despite the ruling that temporarily blocks President Trump removing Fed Governor Cook. The judge said that possible mortgage fraud was unlikely to be “cause” for dismissal and that the way she was dismissed was against the constitution. With threats to Fed independence recently driving bullion higher, it has not responded to the news. Gold is currently up 0.4% to $3639.0 supported by increased Middle East tensions as well as a lower US dollar (BBDXY -0.1%). US yields are steady.
- Bullion reached a high of $3640.91 early in today’s APAC trading holding below yesterday’s record of $3674.27.
- The FT reported that President Trump told European representatives that he’s prepared to impose the same tariffs as Europe on China and India for buying Russian energy. However, Trump said he had spoken with his “good friend” Indian PM Modi.
- Gold has found support from increased central bank buying with the PBoC purchasing over successive months but Bloomberg reported that RBI is also accumulating and that Czech holdings are at record.
- After falling 1.2% on Tuesday, silver is 0.4% higher today at $41.03. It fell to $40.721 and then recovered to a high of $41.045.
- Equities are rallying with the S&P e-mini up 0.2%, Hang Seng +1.2% and KOSPI +1.5%. Oil prices are higher again with WTI +0.9% to $63.20/bbl. Copper is up 0.4%.
- Later August US PPI data are released and will be watched closely given that a 25bp rate cut is fully priced in for September 17. CPI is out on Thursday. The ECB’s Buch speaks today.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
US TSYS: Futures Trade Slightly Higher
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: Bond Futures Down in Morning Trade
- 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%
MNI EXCLUSIVE: Limited PPI Impact From China's Supply Reforms
A leading commodities expert shares her view on China's supply reforms.
On MNI Policy MainWire now, for more details please contact sales@marketnews.com
