FED: WSJ Reporting Trump Considering Replacing Powell By October

Gold prices were slightly lower as risk sentiment improved with equities rallying following news that US-EU trade talks would continue until July 9 without any new tariffs. Bullion fell 0.4% to $3343.84/oz to be 1.7% higher this month. It has started today up 0.1% to $3347.30. The USD index was down slightly.

• Gold fell to a low of $3347.68 in early European trading after reaching a high of $3356.80 during the APAC session. Medium-term signals remain bullish with the bull trigger at $3500.1. Initial resistance is at $3365.9, 23 May high, while first level support is at $3276.4, 20-day EMA.
• On Friday US President Trump threatened the EU with 50% tariffs from June 1 because of his frustration at how slow negotiations were proceeding but after discussing the issues with EC President von der Leyen any additional tariffs were pushed back to July 9 to allow talks to continue. He also proposed 25% duties on Apple phones not made in the US. Increased trade tensions have supported gold prices.
• Equities rallied with the Eurostoxx up 1.3% and the S&P e-mini +1.3% (+1.1% today so far). Oil prices were little changed, copper +0.2% but iron ore down to just below $97/t. Silver was slightly higher at $33.49 and has started today down to $33.45.

• MNI: UK MAY BRC SHOP PRICES +0.2% M/M, -0.1% Y/Y

In local morning trade, NZGBs are 1-2bps richer after US tsy futures claw back losses tied to President Trump’s extension of the EU tariff pause. There was no cash trade in US tsys overnight.

• Minneapolis Fed President Neel Kashkari reminded investors of the potential for an extended pause in the central bank’s easing cycle. He signalled Monday that September could be the earliest date for the next move in interest rates, though he was unsure if the picture would be clear enough by then.
• Swap rates are little changed.
• Today, the local calendar will be empty
• RBNZ-dated OIS pricing has changed little across meetings today. Markets continue to price in 25bps of easing for Wednesday's meeting, with 64bps expected by November 2025. However, rates remain 2-18bps higher than levels observed prior to the Q1 CPI release on April 17.
• Amid firmer NZ rates and softer Australian rates following last week's dovish RBA pivot and rate cut, the expected year-end policy rate differential between Australia and New Zealand has narrowed by 20-25bps over the past week, currently standing at ~+25bps.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 4.50% May-30 bond and NZ$225mn of the 4.25% May-36 bond.