GOLD: US Data Sees Biggest Fall in a Week; Jackson Hole Next

The NZD/USD had a range overnight of 0.5773 - 0.5808, Asia is currently trading around 0.5775. The NZD topped out above 0.5800 and has drifted lower as US stocks walked back their early Asian gains. The FOMC this week will be key for the direction of the USD and it's likely we do some work and chop some wood as we head into it. On the day, there is support toward 0.5740-0.5760, I will be watching to see if this continues to hold ahead of the FOMC, without a catalyst I suspect it could. I have been skewed toward fading this move higher but have been wary of a market positioned quite short. I suspect 0.5740-0.5860 will probably cover us until the FOMC.        

• MNI IRAN: Al Arabiya: "Iran’s Supreme Leader Mojtaba Khamenei has reaffirmed. Al Arabiya: "Iran’s Supreme Leader Mojtaba Khamenei has reaffirmed Tehran’s backing for Hezbollah, saying Iran has made the preservation of Lebanon’s territorial integrity and the complete and unconditional end of Israeli military action there the primary condition of its memorandum of understanding with the United States to end the war, according to a letter published by state media."
• MNI INTERVIEW: Fed To Consider Hike in Sept - Lockhart The Federal Reserve may be headed for a rate hike in September as the recent rebound in energy prices tips support toward tightening, former Atlanta Fed President Dennis Lockhart told MNI.
• Options : Closest significant option expiries for NY cut, based on DTCC data:  none. Upcoming Close Strikes : 0.5750(NZD510m July 29) - BBG
• The NZD/USD Average True Range for the last 10 Trading days: 36 Points
• Data/Event: Filled Jobs SA 

Fig 1: NZD/USD Spot Daily Chart

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

The AUD/USD had a range overnight of 0.6985-0.7011, Asia is currently trading around 0.6990. The AUD/USD is consolidating around 0.7000 as the market looks toward tomorrow’s CPI data and then the upcoming FOMC. The US session walked back Asia’s early attempt to put risk back on the front foot, there is growing concern that China is getting closer to the west in not just AI but chipmaking as well. If so and with their manufacturing capabilities it puts some of the overpriced Chipmakers on notice and we saw them get hit pretty hard overnight. As soon as stocks come back under pressure, miraculously Trump starts talking about a possible return to negotiations. Nothing has changed though other than Iran showing it has been able to deplete the US missile stockpile. On the day, the short-term support remains in the 0.6950-0.6970 area; this would need to give way for the move lower to reassert itself. I continue to be skewed toward fading this rally between 0.7000-0.7050, looking for the price to top out at some point and turn lower again. I suspect the FOMC this week will be the main attraction though and we might chop some wood and see some range trading ahead of that with the market unlikely to add to risk ahead of that, unless we get some clear guidance toward the negotiation table in the Middle-East.   

• MNI IRAN: Trump Speaks on Air Force One: Bearish Headlines President Trump speaks to reports on Air Force One, discussing the ongoing discord with Iran. His comments indicated that there may be a return to talks and negotiations but he did not shy from highlighting the US military power if escalation is necessary.  
• MNI: Headline June CPI is expected to be stable around 4.0% y/y but given it continues to be distorted by government policy and its timing, the focus will remain on the underlying trimmed mean. June trimmed mean is forecast to rise 0.1pp to 3.7% y/y and Q2 0.9% q/q bringing the annual rate to 3.7% y/y up from Q1’s 3.5% but slightly below the RBA’s May projection of 3.8%. It had another 35bp of tightening by end-2026 in its forecasts to bring core inflation down and within its target band by H2 2027.  
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6925(AUD400m). Upcoming Close Strikes : 0.6900(AUD1.02b July 29), 0.7025(AUD718m July 30) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 36 Points

Fig 1: AUD/USD spot Daily Chart

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

• Hong Kong to Sell HK$5 Bn 364-Day Bills
• Hong Kong to Sell HK$15 Bn 182-Day Bills
• Hong Kong to Sell HK$64.969 Bn 91-Day Bills
• China to Sell 30 Bn Yuan 91-Day Bills
• Indonesia to Sell 5% 2030 Sukuk Bonds
• Indonesia to Sell 6.75% 2043 Sukuk Bonds
• Indonesia to Sell 5.875% 2028 Sukuk Bonds
• Indonesia to Sell 188-Day Sukuk Bills
• Indonesia to Sell 256-Day Sukuk Bills
• Indonesia to Sell 6.5% 2039 Sukuk Bonds
• Indonesia to Sell 6.875% 2049 Sukuk Bonds
• Indonesia to Sell 40-Day Sukuk Bills
• MAS to Sell S$22.1 Bn 84-Day Bills
• MAS to Sell S$13 Bn 28-Day Bills
• Philippines to Sell PHP30 Bn 7% 2029 Bonds
• Philippines to Sell PHP20 Bn 6.875% 2044 Bonds