The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. More here.Zero 7-day reverse repos volume today for the third time this week, PBOC citing demand from primary dealers This article was written by Eamonn Sheridan at investinglive.com.

The miss against forecast should not be read as genuine disinflation. At 7.2%, Japanese producer price growth remains near multi-year highs, and the shortfall against the 7.4% consensus is a modest undershoot on an already elevated base rather than a meaningful turn in the trend. The more important number here is the 29.1% jump in yen-based import prices, a scale of imported cost pressure that keeps the structural case for a September BOJ hike firmly intact regardless of the headline miss. That framing lines up with the more hawkish undertone out of the RBA overnight, where Kent flagged upside inflation risk and left the door open to further hikes if it materialises, a reminder that several regional central banks are leaning the same direction even as individual data points come in mixed. For yen watchers, the detail that the currency has already given back more than half of the gains from the coordinated intervention in late July is the more actionable signal than the PPI headline itself, since it suggests the BOJ faces continued pressure from currency weakness independent of what any single inflation print shows.---A forecast miss doesn't change much when producer prices are still running near 7.2 percent, and yen weakness keeps pushing import costs sharply higher regardless.Summary:Japan's producer price index rose 7.2% year on year in July, below the 7.4% expected by economists polled by Reuters and down modestly from a revised 7.3% in June, though still historically elevatedOn a monthly basis, PPI rose just 0.1%, well short of the 0.6% forecast and down from 0.4% in JuneElectricity prices were the largest single contributor to the monthly increase, adding around 0.23 percentage point, partly offset by falling energy and chemical pricesThe yen-based import price index climbed 29.1% year on year in July, only modestly down from 30.1% in June, underscoring how much yen weakness continues to inflate import costs for Japanese businessesThe yen touched multi-decade lows near 164 against the dollar in late July before a coordinated intervention by Tokyo and Washington strengthened the currencyThe yen has since given back more than half of the gains achieved through that interventionDespite the softer-than-forecast headline, the data adds to the case for a September BOJ rate hike given the scale of ongoing imported inflation pressure Japan's producer price index rose 7.2% year on year in July, missing the 7.4% forecast from economists polled by Reuters and easing modestly from a revised 7.3% in June, according to official data released Thursday. Even with the miss, the reading remains historically elevated, and the monthly figure told a similar story: PPI rose just 0.1% against a 0.6% forecast, down sharply from June's 0.4% gain, a shortfall that on the surface might suggest tightening cost pressure is fading.Electricity prices were the single largest driver of the modest monthly increase, adding around 0.23 percentage point, a gain partly offset by falling energy and chemical prices elsewhere in the basket. That mix suggests the miss reflects some genuine easing in energy-linked cost pressure rather than a broad-based cooling across the producer price basket, which remains close to multi-year highs.The more significant number in Thursday's release sits outside the headline PPI figure. The yen-based import price index climbed 29.1% year on year in July, only modestly down from 30.1% in June, a scale of imported inflation that continues to weigh heavily on Japanese businesses as a weaker currency inflates the cost of dollar-denominated purchases. The yen touched multi-decade lows near 164 against the dollar in late July before a coordinated intervention from Tokyo and Washington helped strengthen the currency, though it has since surrendered more than half of those intervention-driven gains, leaving import cost pressure largely intact.That persistence in imported inflation is why Thursday's data adds to, rather than detracts from, the case for a Bank of Japan rate hike in September, even with producer prices coming in below forecast. The dynamic echoes a broader regional theme playing out overnight, where Reserve Bank of Australia Assistant Governor Christopher Kent flagged that inflation risks lean to the upside and left open the possibility of further rate hikes there too. Taken together, the two sets of remarks suggest central banks across the region are increasingly willing to look past forecast misses on individual data points and focus instead on the structural forces, currency weakness in Japan's case, still working against their inflation goals. This article was written by Eamonn Sheridan at investinglive.com.

This second batch of comments tempers the more settled tone from Kent's earlier remarks on rate transmission and neutral rate estimates. Explicitly aligning with Governor Bullock's view that inflation risks lean to the upside, and floating the possibility of further hikes if those risks materialise, pushes the overall message from "policy is working as intended" toward "policy could still need to do more." The productivity comment adds a structural dimension: weak productivity growth means a given level of demand generates more inflationary pressure than it otherwise would, directly complicating the RBA's task regardless of where the cash rate sits relative to neutral. The aside on generous equity valuations is unusual from an RBA official and worth flagging on its own, a financial stability observation that sits alongside, rather than directly feeding into, the inflation and rates discussion, but one that adds a layer of caution to the broader risk picture.--- Kent's later remarks add a more hawkish edge to his earlier comments, pairing an open door to further hikes with an unusual RBA nod to stretched equity valuations.Summary:RBA Assistant Governor Christopher Kent said Governor Michele Bullock emphasised uncertainty around the outlook and that risks to inflation lean very much to the upsideKent said productivity has been very disappointing, which makes the RBA's job on inflation harderHe raised the possibility of the cash rate rising further if those upside risks materialiseKent also said valuations in some equity markets do seem very generous Reserve Bank of Australia Assistant Governor Christopher Kent followed his earlier remarks on rate transmission and housing with a more cautious set of comments at the same Reuters Next event on Wednesday, aligning himself with Governor Michele Bullock's view that risks to the inflation outlook lean firmly to the upside. Kent said Bullock had emphasised the uncertainty around that assessment, and he did not shy away from the implication, explicitly raising the possibility that the cash rate could rise further should those upside risks materialise.That comment sits somewhat in tension with his earlier observation that the cash rate already sits near the top of the range of central neutral rate estimates the RBA tracks, a reminder that the bank's tightening bias remains live even as it describes current settings as broadly appropriate. Kent pointed to weak productivity growth as a specific factor complicating the inflation fight, saying productivity has been very disappointing and that this makes the central bank's task materially harder, since weaker productivity effectively lowers the amount of demand the economy can absorb before generating inflationary pressure.Kent also offered an aside on financial markets that stood out from the rest of his remarks, saying valuations in some equity markets do seem very generous. The comment, while not tied directly to the inflation and interest rate discussion, adds a financial stability dimension to the RBA's broader risk assessment and is a notable departure from the central bank's usual reluctance to comment on asset price levels. Taken together with his earlier remarks on softening housing conditions and AI-driven investment supporting demand, Kent's full set of comments paints a more complicated picture than the initial headline suggested, one where policy is judged to be working but where upside inflation risk, weak productivity and stretched asset valuations all argue for continued caution rather than an early pivot toward easing. This article was written by Eamonn Sheridan at investinglive.com.

Kent's remarks read as a central bank comfortable with where policy currently sits rather than signalling further tightening is imminent, with the acknowledgment that the cash rate is near the top of neutral estimates suggesting limited appetite to push materially higher from here without fresh cause. The housing market softening he describes, partly attributed to federal budget tax changes rather than rates alone, gives the RBA some cover to hold steady if incoming data cooperates. The AI and data centre investment comment is notable as a genuine offset to softer housing demand within aggregate growth, a dynamic increasingly common across developed economies and one that complicates the read on how restrictive policy actually is. Overall the tone leans balanced to mildly dovish for AUD, though the considerable uncertainty flagged around neutral rate estimates keeps the door open either way.--- Kent is signalling the RBA sees its tightening cycle doing its job, with a cooling housing market and resilient AI-driven investment demand both feeding into the board's next move.Summary:RBA Assistant Governor Christopher Kent said cash rate increases are having their intended effectKent said a higher exchange rate is helping moderate inflation by lowering the domestic price of importsHe said the cash rate currently sits around the top of the range of central estimates of the neutral rate across the RBA's various modelsKent flagged considerable uncertainty around those neutral rate estimatesHe said housing market conditions have softened noticeably in recent monthsKent linked that softening in part to tax changes announced in the federal budget, which he said appear to have reduced demand in the established housing marketHe said substantial investment in data centres and AI-related infrastructure has helped support growth in aggregate demandKent said the RBA board will carefully weigh the wide range of factors influencing financial conditions Reserve Bank of Australia Assistant Governor Christopher Kent said Wednesday that the central bank's cash rate increases are having their intended effect, offering one of the clearest signals yet that policymakers view the current tightening cycle as broadly on track. Speaking at a Reuters Next event, Kent said the cash rate now sits around the top of the range of central estimates of the neutral rate across the various models the RBA uses, though he was careful to flag considerable uncertainty attached to those neutral rate estimates themselves.Kent pointed to the exchange rate as one channel through which policy is working, saying a higher Australian dollar is helping to moderate inflation by lowering the domestic price of imports. On the housing side, he said conditions have softened noticeably in recent months, a shift he linked partly to tax changes announced in the federal budget, which he said appear to have contributed to reduced demand in the established housing market. That combination, a softer property market alongside a currency doing some of the disinflationary work for the central bank, points to policy transmission functioning largely as the RBA intended.At the same time, Kent highlighted an offsetting force within the broader economy, noting that substantial investment in data centres and AI-related infrastructure has helped support growth in aggregate demand. That comment situates the RBA's assessment within a wider global theme, where AI-linked capital expenditure has increasingly been cited by central banks as a source of resilience in demand even as more interest-rate-sensitive sectors such as housing cool. Kent said the RBA board will carefully weigh the wide range of factors influencing financial conditions as it determines its next steps, a formulation consistent with the bank's recent approach of avoiding firm forward guidance while acknowledging the balance of considerations has become more complex. This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

Just the data in this post. Japanese PPI July 2026 will add to the case for a September BOJ rate hike:+7.2% y/y vs. expected +7.4% and prior + 7.1%+0.1% m/m vs. expected +0.6% and prior +0.4%I'll have more to come on this separately.Here now: Japan July PPI surges 7.2%, but lower than the expected 7.4% This article was written by Eamonn Sheridan at investinglive.com.

The move underlines how the 52.5% tariff on Chinese-built vehicles is now driving concrete reshoring decisions rather than just squeezing margins on existing import volumes, with Ford following General Motors down the same path on separate Lincoln and Buick nameplates. For Ford specifically, shifting Nautilus production onshore removes a tariff and regulatory overhang tied to Chinese-sourced technology under the Connected Vehicle Rule, though the 2030 timeline means the near-term earnings impact from the existing duty structure persists for several more years. The broader read for the sector is that further tightening under consideration in the Senate, which would bar companies more than 15% Chinese-owned from selling in the US, keeps regulatory risk elevated for automakers with China exposure, Mercedes-Benz among them, and reinforces the incentive to localise production regardless of near-term cost.--- Ford is following General Motors in pulling Lincoln production out of China, a decision Farley says was locked in the moment Washington's tariff policy became clear.Summary:Ford plans to move production of some Lincoln models from China to the US starting in 2030, CEO Jim Farley told ReutersThe US currently applies a 52.5% tariff on the Lincoln Nautilus, the main model Ford imports from ChinaFarley said tariffs were the primary driver of the decision, with the Connected Vehicle Rule, which bans certain Chinese technology and hardware in US vehicles, also a factorFarley said Ford made the call as soon as the administration's tariff policy was set, in a joint interview with US Commerce Secretary Howard LutnickUS-made Lincolns would be sold domestically as part of a broader effort to scale up output, though Ford has not disclosed where they will be producedThe move follows General Motors, which has already announced plans to shift Buick Envision production from China to the US starting in 2028Ford said it learned after discussions with the Commerce Department that the Nautilus no longer needs regulatory authorisation to continue selling in the US, after previously requiring approval due to its China-installed, US-developed softwareFord sold around 34,000 Nautilus vehicles in the US last yearA separate Senate Commerce Committee-approved measure would bar companies more than 15% Chinese-owned from selling vehicles in the US, a rule that would affect Mercedes-Benz if implementedLincoln already builds the Navigator in Louisville, Kentucky and the Aviator in Chicago, exporting both to Canada, Mexico and Middle East markets Ford Motor plans to move production of some Lincoln models from China to the United States starting in 2030, Chief Executive Jim Farley told Reuters on Wednesday, describing the shift as difficult but necessary to strengthen the company's domestic manufacturing base. The decision centres on the Lincoln Nautilus, the main model Ford currently imports from China and one that faces a steep 52.5% US tariff on gasoline and electric vehicles built there.Farley said tariffs were the primary factor behind the move, made in a joint interview with US Commerce Secretary Howard Lutnick. "We made this decision as soon as the policy of the administration was set," Farley said, adding that Ford understood exactly what the tariff policy meant for the company once it became clear. A separate regulatory factor also weighed on the decision: the Connected Vehicle Rule, which restricts the use of certain Chinese technology and hardware in vehicles sold in the US. Farley said both issues contributed, though he pointed to tariffs as the more significant driver. Lutnick, for his part, framed the shift as a competitive advantage for Ford, saying domestic manufacturing gives the company an edge.The US-built Lincolns would be sold in the domestic market as part of a broader push to scale up American output, Farley said, although Ford has not yet disclosed where the vehicles will be manufactured. The move follows a similar decision from General Motors, which has already said it will shift production of its Buick Envision from China to the US starting in 2028, suggesting tariff and regulatory pressure is prompting comparable reshoring moves across Detroit's automakers.Separately, Ford said discussions with the Commerce Department led it to determine the Nautilus no longer requires special authorisation to continue selling in the US. The company had previously said Nautilus software was developed domestically but installed in China, a combination that required government approval under the Connected Vehicle Rule. Automakers denied such authorisation, including EV maker Polestar, face outright bans on selling affected products in the US. Ford sold around 34,000 Nautilus vehicles domestically last year.The regulatory backdrop for Chinese-linked auto content continues to tighten. A measure approved by the Senate Commerce Committee in July would go further than the existing Connected Vehicle Rule, barring any company more than 15% owned by Chinese entities from selling vehicles in the US, a threshold that would affect Mercedes-Benz if the measure becomes law. Ford said Wednesday's announcement builds on Lincoln's existing US manufacturing footprint, which already includes the Navigator, assembled in Louisville, Kentucky, and the Aviator, built at the Chicago Assembly Plant. Both models are currently exported to markets including Canada, Mexico and the Middle East. This article was written by Eamonn Sheridan at investinglive.com.

Daiwa's framing supports the broader post-CPI consensus that the Fed stays on hold in September, but the note's real value is in the underlying detail rather than the headline call. The bank draws a clear line between areas still running hot, medical care and airline fares among them, and housing components that continue to track close to pre-pandemic norms, a distinction that matters because housing carries the heaviest weight within core services and is therefore the component the Fed watches hardest for a durable return to target. By stripping out rounding to show the true year-over-year trend continuing to ease on both headline and core, Daiwa is making the case that the recent Iran-driven inflation scare is fading from the data, even as the bank stresses that underlying inflation remains well above the FOMC's 2 percent goal and that August's data, due before the September meeting, could still shift the picture.--- Daiwa reads two consecutive soft CPI prints as evidence the Iran-driven inflation scare is fading, with a still-favourable housing trend doing much of the work.Summary:Headline CPI rose 0.1 percent in July, in line with the median economist forecast, after a 0.4 percent decline the prior month, Daiwa notedCore CPI advanced 0.2 percent, also matching expectations, after rounding to no change in JuneOn a less-rounded basis, annual headline inflation eased to 3.4 percent from 3.5 percent in June, while core inflation slowed to 2.5 percent, its softest pace since March 2021Daiwa said consumer inflation metrics have settled over the past two months following a bout of resurgent price pressure tied to the Iran conflictThe bank said the results likely allow the FOMC to remain on the sidelines in September, though it cautioned that vigilance is still required with inflation well above targetCore services prices rose 0.2 percent after a flat June reading, with medical care services up 0.6 percent and airline fares jumping 2.2 percent on the monthHousing components stayed on recent trends, with both rent of primary residence and owners' equivalent rent rounding up to 0.3 percent monthly gains, and their 12-month trends remaining consistent with pre-pandemic normsDaiwa said it was heartened by a second consecutive subdued CPI reading but stressed underlying inflation still sits well above the Fed's price-stability goal, and that August employment and inflation data due before the September 15-16 meeting could still alter its view Daiwa said Wednesday's July CPI report, the second consecutive subdued reading, likely gives the Federal Reserve room to stay on the sidelines at its September policy meeting, even as the bank cautioned that underlying inflation remains well above target and that the picture could still shift before the decision is made. Headline consumer prices rose 0.1 percent for the month, matching the median forecast in a Bloomberg survey of economists, following a 0.4 percent decline in June. Core prices advanced 0.2 percent, also in line with expectations, after effectively rounding to no change the prior month.Looking past the headline rounding, Daiwa highlighted that the underlying annual trend continues to ease on both measures. Headline inflation slowed to 3.4 percent year over year from 3.5 percent in June on a less-rounded basis, while core inflation eased to 2.5 percent, its softest annual pace since March 2021. The bank framed the two straight subdued readings as evidence that the resurgence in price pressure tied to the Iran conflict earlier this year is beginning to settle, a development it said should allow the Fed to hold rates steady in September, though it stressed that policymakers still need to remain watchful given how far inflation sits above the 2 percent goal.Within the details, Daiwa flagged a split between areas still showing firm price pressure and those tracking more favourably. Core services prices rose 0.2 percent after a flat June reading, with medical care services climbing 0.6 percent on the month and airline fares jumping 2.2 percent, though both categories saw their annual rates ease slightly from June's pace. Housing, the largest component within core services, continued on its recent trajectory, with both rent of primary residence and owners' equivalent rent rounding up to 0.3 percent monthly increases. Daiwa said the 12-month trends for both housing measures remain in line with favourable pre-pandemic norms, a condition the bank views as necessary for inflation to eventually return sustainably to the Fed's 2 percent target.Taken together, Daiwa said it was encouraged by the back-to-back subdued CPI readings and views them as a sign that inflation may be starting to settle after months of elevated pressure. The bank was nonetheless careful to note that underlying inflation still sits well above the FOMC's price-stability objective, a gap that may ultimately require a policy response of its own. For now, Daiwa said the latest data likely eases some of the pressure heading into the September 15-16 meeting, though it flagged that employment and inflation data covering August, both due for release before policymakers meet, could still alter that assessment. Federal Reserve Chair Warsh  This article was written by Eamonn Sheridan at investinglive.com.

The story adds another data point to the broader trend of AI platforms striking commercial deals with publishers rather than relying solely on scraped or trained-in content, a shift that has become a modest but growing revenue line for media companies. For Apple specifically, it signals the company is treating the upcoming Siri overhaul as a genuine competitive priority after years of criticism over the assistant's limitations, rather than a cosmetic update. The variable, pay-as-used structure being proposed is a departure from the guaranteed-fee licensing model more commonly used elsewhere in the industry, and could set a template other AI developers look to if it proves workable at scale. There is no confirmed dollar figure yet, with only a possible nine-figure budget under discussion, so the direct financial impact on individual publishers remains uncertain pending final terms.--- Apple wants publishers to feed live news into its overhauled Siri, and it is willing to pay for it, just not in the way the industry is used to.Summary:Apple is discussing new deals with publishers to supply current news and information for its AI-powered Siri voice assistant, the Wall Street Journal reportedThe proposed multiyear deals would help power the Siri AI overhaul, which is expected to roll out later this yearApple has proposed a variable compensation structure, paying publishers when their content is actually used, rather than a flat guaranteed feeThe company has discussed a possible nine-figure budget for the payments, according to people familiar with the matterApple declined to comment on the discussionsStandard licensing arrangements between large AI companies and publishers typically involve guaranteed fees tied to broad content access, unlike the pay-as-you-go model Apple has proposedApple has previously paid publishers for content access, including deals covering AI training rightsThe company has also worked with publishers since 2019 through its Apple News+ subscription service, which has provided meaningful revenue for some participants even as others have exited Apple is in discussions with publishers over new, multiyear content deals intended to give its Siri voice assistant access to current news and information, according to the Wall Street Journal, which cited people familiar with the matter. The talks are part of a broader push to overhaul Siri, an assistant that has drawn years of criticism for lagging behind rival AI products, with the upgraded version expected to launch later this year.According to the report, Apple has approached publishers in recent months and proposed a variable compensation structure under which payments would be made only when a publisher's content is actually used to power a Siri response, rather than through a flat guaranteed fee. The company has also discussed a possible nine-figure budget for the arrangement, the people said. That structure marks a departure from the standard licensing model that has emerged elsewhere between large AI companies and news organisations, which typically guarantees fees in exchange for broad access to a publisher's archive regardless of how much of that content ends up being used in practice.Apple declined to comment on the discussions. The push comes as the company works to make Siri meaningfully more capable, following the recent announcement of an upgrade intended to weave AI more deeply into everyday interactions with its devices. Apple is not new to paying for content access. The company has previously reached agreements with publishers that included rights to use material for AI training, and it has run a separate content partnership since 2019 through its Apple News+ subscription service. That programme has generated meaningful revenue for a number of participating news and magazine publishers over the years, though some publishers have since chosen to withdraw from the arrangement.If the new Siri-focused deals proceed, they would extend Apple's publisher relationships beyond subscription and training-data arrangements into live, current-events content, a category that carries particular value for an AI assistant aiming to answer real-time questions accurately. The pay-as-used structure being proposed could also serve as a test case for whether usage-based compensation is viable at scale, an approach that shifts more of the financial risk onto publishers compared with guaranteed-fee models, but which could ultimately reward outlets whose content proves most useful to the assistant's underlying AI system. This article was written by Eamonn Sheridan at investinglive.com.

UBS's call is constructive on both the cyclical and structural drivers of gold, tying the metal's outlook directly to its Fed rate path view: a hold through 2026 followed by renewed easing in 2027 would pull real yields lower and weigh on the dollar, the classic combination that has historically drawn investment flows back into bullion. The explicit dip-buying framing, treating any move toward $4,000 an ounce or below as an entry opportunity rather than a warning sign, signals the bank sees the medium-term trend as intact even if near-term dollar resilience caps immediate upside. Central bank buying adds a further layer of support that is less sensitive to the rate cycle, acting as a stabiliser for the market even through periods when private investment demand and jewellery consumption soften.--- UBS is telling clients to treat any pullback in gold as a buying opportunity, betting that falling real yields and a softening dollar will keep the structural case for the metal intact.Summary:UBS expects lower real interest rates to revive investment demand for gold, since higher real yields raise the opportunity cost of holding an asset that pays no incomeThe bank expects inflation to moderate gradually, letting the Fed hold rates steady through 2026 before resuming rate cuts in 2027UBS said that shift toward lower policy-rate expectations should reduce real yields, weigh on the dollar and help lift investment demand for goldThe bank sees the dollar as capable of near-term resilience but flags structural risks, including large US fiscal and external deficits and already elevated investor exposure to dollar assets, as reasons for renewed weakness further outA weaker dollar has historically supported gold, and UBS expects a renewed push toward diversification away from the dollar to benefit the metal furtherCentral bank buying remains a key pillar of support even when private investment demand is soft, with UBS expecting purchases to stay elevated on a long-term push to reduce dollar exposureCentral banks bought around 290 metric tons of gold in a strong second quarter, and UBS estimates full-year purchases in the 750 to 1,000 metric ton rangeUBS said these central bank flows are unlikely to drive prices sharply higher alone but can help stabilise the market and offset softer areas of demand such as jewelleryUBS said periods of weakness toward $4,000 an ounce or below could ultimately prove to be opportunities for building exposure UBS expects a decline in real interest rates to reawaken investment demand for gold, arguing the metal's traditional drawback, that it pays no income, becomes far less of a deterrent once the opportunity cost of holding it starts to fall. The Swiss bank's base case has inflation cooling gradually through the remainder of the year, allowing the Federal Reserve to keep rates on hold through 2026 before resuming easing in 2027, a path UBS says would meaningfully improve the setup for gold as lower policy-rate expectations pull real yields down, pressure the dollar and draw fresh investment flows into the metal.The dollar itself sits at the centre of that call. UBS sees room for the greenback to hold up in the near term but points to structural pressures, chiefly sizeable US fiscal and external deficits alongside already stretched investor exposure to dollar assets, as reasons weakness could reassert itself further out. A softer dollar has historically been supportive for gold, and the bank adds that any renewed push by investors to diversify away from the currency would likely benefit the metal further.Central banks remain the other pillar propping up the market, the bank noted, continuing to buy even through stretches when private investment demand has been soft. UBS expects that official-sector buying to stay elevated over the coming year, underpinned by a longer-term push among central banks to trim their dollar holdings. After a strong second quarter in which central banks added around 290 metric tons to reserves, the bank is pencilling in full-year purchases somewhere in the 750 to 1,000 metric ton range. UBS was careful to frame that buying as a stabilising force rather than a standalone catalyst, unlikely on its own to drive prices sharply higher, but useful in offsetting softer pockets of demand elsewhere in the market, such as jewellery.Putting the pieces together, UBS's overall stance on gold reads as constructive through the cycle rather than tactically bullish in the immediate term. The bank explicitly framed any weakness toward $4,000 an ounce or below as a buying opportunity rather than a signal to step back, a view consistent with its broader thesis that the structural drivers, falling real yields, a softening dollar and steady central bank accumulation, remain firmly intact even if near-term price action proves choppy. This article was written by Eamonn Sheridan at investinglive.com.

The split between Westpac and ASB matters more than the headline forecast itself, since it signals genuine uncertainty over how sticky the oil-driven inflation shock is proving in household and business psychology, precisely the dynamic the RBNZ is watching most closely as it tightens. A stronger-than-expected print, in line with Westpac's call, would reinforce the case for the RBNZ to stay firmly on its 25 basis point hike path and would likely support the New Zealand dollar, including on the AUD/NZD cross, on expectations of a higher terminal OCR. A softer outcome closer to ASB's base case would ease pressure on the central bank without necessarily closing the door on further hikes, given ASB's own flagged upside risks. Either way, the medium to long-term expectation readings will carry outsized weight for how markets price the eventual OCR peak.--- Two of New Zealand's major banks are reading the same inflation backdrop and reaching opposite conclusions about where expectations are headed next.Summary:The RBNZ's Q3 Survey of Inflation Expectations is due Thursday, with the two-year-ahead measure last printing at around 2.5 percentWestpac expects another rise in the closely watched one and two-year-ahead expectations, citing large recent swings in oil prices and overall inflation climbing back to 4.1 percentWestpac sees longer-horizon expectations, at the five and ten-year marks, as more likely to stay stable given the RBNZ's tightening cycle is already underwayASB expects a broadly easing set of readings, pointing to retail fuel prices well off their mid-April peak and softer signals from higher-frequency pricing and expectations surveysASB nonetheless flags upside risk to the Q3 print from the elevated Q2 headline inflation figure, warning its own models suggest medium and longer-term expectations could drift higherASB's Q2 reference points were one-year expectations at 3.4 percent, two-year at around 2.5 percent, five-year at around 2.2 percent and ten-year at around 2.2 percentASB expects the RBNZ to keep affirming its inflation credentials with steady 25 basis point hikes, taking the OCR to 3.25 percent by year endASB notes the OCR could peak lower if spare capacity dampens wage and pricing pressure, or higher if inflation expectations decouple from the 1 to 3 percent target bandTwo of New Zealand's banks are offering starkly different previews of Thursday's Reserve Bank of New Zealand Q3 Survey of Inflation Expectations, a release both Westpac and ASB agree will be closely watched by the central bank even as they disagree on what it will show. The survey's two-year-ahead measure, the RBNZ's preferred gauge of anchored expectations, last printed at around 2.5 percent, and how far it moves from there will shape near-term pricing of the tightening cycle.Westpac expects the survey to show another increase in the closely watched one and two-year-ahead horizons, arguing that inflation expectations already stepped higher in the second quarter and that the backdrop since then has only reinforced the risk. The bank points to large swings in oil prices over the period and to headline inflation climbing back up to 4.1 percent as reasons households and businesses are likely to mark up their near-term price expectations further. Westpac's central concern is less about the current inflation print itself than about the risk of a broader, more enduring shift in pricing behaviour taking hold, the kind of second-round effect central banks work hardest to prevent. The bank does expect longer-horizon expectations, at the five and ten-year marks, to hold comparatively steady, reasoning that the RBNZ's tightening cycle already underway should help keep those further-out anchors in place even as near-term readings move.ASB takes the opposite view on the headline direction, expecting the Q3 survey to show a broad easing in inflation expectations. The bank's reasoning centres on retail fuel prices, which have retreated well off their mid-April peak, alongside encouraging signals from higher-frequency pricing intentions and expectations surveys that it expects to filter through into a softer official reading. However, ASB is not dismissing the risk that cuts the other way. The bank explicitly flags the possibility of upward drift stemming from the elevated second-quarter headline inflation print, and its own forecast models point to some upside risk in the Q3 readings, particularly at medium and longer horizons, if elevated headline inflation begins to feed into how far out households expect prices to keep rising. For reference, ASB's second-quarter survey points came in at 3.4 percent for the one-year horizon, around 2.5 percent for two years, and around 2.2 percent at both the five and ten-year marks.On policy, ASB expects the RBNZ to continue affirming its inflation-fighting credentials with a steady pace of 25 basis point hikes, taking the Official Cash Rate to 3.25 percent by year end. The bank frames that as a central case rather than a fixed outcome, noting the OCR could ultimately peak below that level if spare capacity in the economy dampens wage and price-setting pressure. Conversely, should inflation expectations decouple meaningfully from the RBNZ's 1 to 3 percent target band, the risk skews toward a higher terminal rate than currently pencilled in. That two-sided framing leaves Thursday's survey as a genuine swing factor for how far the RBNZ still has to go in this tightening cycle, rather than a formality ahead of an already-settled policy path. ---The next RBNZ decision is due on September 2: This article was written by Eamonn Sheridan at investinglive.com.

White House press secretary Karoline Leavitt will leave her role at the end of the month. Pres. Trump said that she is leaving to spend more time with her family. Levitt gave birth to her daughter and 2nd child on May 1.Leavitt is a New Hampshire native who became the youngest White House press secretary in U.S. history when she took office in January 2025 at age 27. She graduated from Saint Anselm College in 2019, where she studied politics and communication and attended on an athletic scholarship, playing softball. While in college, she interned at Fox News and in the White House Office of Presidential Correspondence. After graduating, Leavitt joined the first Trump administration and eventually became an assistant White House press secretary under Kayleigh McEnany. After Trump left office, she became communications director for Rep. Elise Stefanik of New York. In 2022, Leavitt ran for Congress in New Hampshire's 1st Congressional District. She won the Republican nomination but lost the general election to Democratic Rep. Chris Pappas. She subsequently became national press secretary for Donald Trump's 2024 presidential campaign and, following Trump's victory, was selected as White House press secretary. Leavitt was born August 24, 1997, making her 28 as of August 2026. She is married to real-estate developer Nicholas Riccio, and they have two children. Leavitt is Trump-esque in being brash and abrupt to the press corp but a loyal supporter to Pres. Trump.  While on maternity leave, the press conferences were conducted by committee, including cabinet members and even the Vice President JD Vance.   I would assume someone would be appointed to the position. This article was written by Greg Michalowski at investinglive.com.

The NZDUSD has been stuck in a narrow trading range going back to July 30, with most of the price action contained between 0.5858 and 0.5906. Sellers are now making a play for more control, with the pair slipping below the lower end of that range to a low of 0.5853. The current price is trading near 0.5857.The question now is whether sellers can take advantage of the break and build downside momentum.A sustained move below 0.58526, the 61.8% retracement of the decline from the June 1 high, would strengthen the bearish bias and open the door for further selling. The next downside target comes at the 0.5813–0.58219 swing area, followed closely by the 50% midpoint of the range since June 1 at 0.58092.However, sellers still need to prove they can keep the price below the broken range floor. If they fail to capitalize on the move lower, the risk is for another snapback rally. On the topside, the converged 100- and 200-hour moving averages near 0.5877 would be the first key hurdle in the new trading day. A move back above those moving averages would weaken the bearish bias and shift the focus back toward the 0.5906 swing-high area.Sellers are making their play. Staying below 0.58526 keeps them in control; a failure to extend lower would raise the risk of another rotation back toward the key hourly moving averages. This article was written by Greg Michalowski at investinglive.com.

Crude oil futures are settling at $83.27, up $0.07 or 0.08% on the day. The session high reached $84.35, while the low extended to $82.40.Technically, crude is settling back below the 50% retracement of the decline from the July high at $83.87. The price traded above that level earlier in the session, but buyers could not sustain the break. In addition, today's high at $84.35 fell short of Tuesday's high at $84.54. That combination gave sellers the go-ahead to push the price back to the downside.On further selling, a break below today's low near $82.40 would have traders targeting the 38.2% retracement at $81.60. Move below that level, and attention would shift toward the 100-hour moving average at $80.52, followed by the 200-hour moving average at $79.64.On the topside, buyers need to get the price back above the 50% retracement at $83.87 — and stay above it — to regain more control. Buyers took their shots above that level yesterday and again today, but both attempts failed. The rebound from today's initial low also stalled right near $83.87 before rotating back to the downside.For now, $83.87 remains the key technical barometer. Stay below and the sellers retain the short-term advantage; get back above and hold above, and the buyers would have another opportunity to make a run toward the recent highs. This article was written by Greg Michalowski at investinglive.com.

This US fiscal picture isn't improving but it might not be quite as bad as it looks.The July deficit of $432 billion compared to last year's level of $291 billion and exceeded the consensus estimate of $346 billion. The main problem is government spending as it hit a record for the month of July at $766 billion. That also put the deficit at the highest of any month since 2021.Now some of the monthly numbers can skew because of how the days of the week (and pay periods) fall in any given month but the trajectory of US government debt is undeniable. The US deficit so far in this fiscal year is $1.799 trillion compared to $1.629 trillion a year earlier.It might not be quite as dismal as it looks as tariff refunds were part of the story as net customs receipts were $8.55 billion in the month on $33.38 billion in refunds. Still, tariffs are coming nowhere close to plugging the holes in the US budget and the market continues to notice.Today the US solid 10-year notes at the highest rate since the financial crisis. In related news, gold is up $41 to $4407 today.   This article was written by Adam Button at investinglive.com.

Canadian consumers accelerated spending in the second quarter and it wasn't just because of higher gasoline prices. RBC says that based on its cardholder data, spending rose 2.4% in the quarter excluding sales at gas stations. Moreover, spending on discretionary goods rose 3.7% from Q1."Household and construction purchases saw its first quarterly gain since mid-2025, coinciding with early signs of renewed homebuyer interest. Spending on clothing and apparel also strengthened after a slow start to the year," RBC said.RBC economists say they're optimistic that spending will continue in H2 despite high energy costs.As for the World Cup, RBC said there was a significant increase in spending at food and drink vendors over the tournament period. That swelled spending in that category to 12.5% of total cardholder spending, the highest since the survey began in 2018.Canada next reports retail sales for June on August 21 while the US reports on retail sales this Friday. This article was written by Adam Button at investinglive.com.

High yield 4.683%WI 4.682%Tail 0.1 basis points vs average of +0.3 basis pointsBid to cover 2.53X vs 6 month average of 2.47XDirects 14.7% vs 17.7% averageIndirects 76.7% vs 71.3% averageDealers 8.6% vs 11.0% averageAuction Grade: B+There was a modest tail but it is against an average of 0.3% BId to cover was higher vs the average (good). Domestic buyers were less than the average but international demand was stronger. The dealer were left with less than the average which is the best part and leads to the solid B+ grade.   This article was written by Greg Michalowski at investinglive.com.

The US CPI data came out earlier but if the Fed and new Fed Chair had a favorite inflation measure it remains the PCE.  The important thing to realize is that PCE is not simply CPI translated into another index. The BEA builds PCE using a mix of CPI, PPI, and other source data.For the monthly core PCE estimate, the biggest pieces traders watch are:From CPI: Many consumer-facing services and goods, particularly housing/rents, medical services, transportation services, recreation, education, and various other consumer services. CPI gives analysts an early read on many PCE components. From PPI: Several components that aren't captured well by consumer prices. The most market-sensitive are health-care services—including physician services, hospitals and nursing care—as well as airfares/air transportation, financial services, insurance and portfolio-management-related prices. Other sources: BEA also uses additional government and industry data, so CPI and PPI don't completely determine PCE. Why tomorrow's PPI mattersAfter today's CPI, economists can make a preliminary core PCE estimate, which is why you're seeing estimates around +0.16% to +0.23%.Tomorrow's PPI fills in some important missing pieces—especially health-care and financial-service components. Nevertheless, there are some estimates that are being shared ahead of the PPI.  Pantheon, is often followed by the market and they quesstimate a rise of +0.16% core PCE estimate. That would lower the annual rate to 3.2% from 3.3%. They state that if so, it would be enough to keep the Fed on hold in September.Other estimates show:Oxford Economics: Forecasts headline PCE +0.1% m/m and core PCE +0.2%, saying the CPI data strengthen the case for a September hold. Goldman Sachs: Sees a somewhat firmer +0.23% m/m core PCE increase. Methodology changes could add volatility while lowering the annual core inflation rate. Bottom line: Estimates cluster around a 0.2% monthly core PCE increase, reinforcing expectations that inflation is gradually cooling and giving the Fed room to keep rates unchanged in September.  Of note is that the September meeting decision is on September 16.  The PPI data will be released on September 10 while the CPI will be released a day later on September 11. The US jobs report will be released on September 4th. So although the prognosticators are saying something in line with the estimates would be "good enough to keep the Fed on hold in September", the fact is it likely won't as key data points will still be released before the next meeting.  The current headline and core PCE shows. Headline PCE inflation: 3.7% year-over-year, down from 4.1% in May TRADING ECONOMICSCore PCE inflation (excludes food and energy): 3.3% year-over-year in June, down slightly from 3.4% in MayThose numbers are still well above the 2% target. The market's and analysts may be more confident of no rate change in September, but my guess is that it may take until September 11th to really know what may happen.September th This article was written by Greg Michalowski at investinglive.com.

As London/European traders head for the exits, the major European equity indices are closing mostly lower. There were no new record closes today, with France's CAC 40 leading the declines.The closing levels show:German DAX: -0.17% at 26,346.30France CAC 40: -0.46% at 8,674.95UK FTSE 100: -0.10% at 10,833.16Spain's Ibex: -0.05% at 20,204.39Italy's FTSE MIB: -0.01% at 53,698.65In the European debt market, benchmark 10-year yields are ending the session little changed and mixed. Yields are lower in Germany, France and Italy, while UK and Spanish yields are modestly higher:Germany 10-year: 3.161%, -0.4 basis pointsFrance 10-year: 3.979%, -0.6 basis pointsUK 10-year: 4.976%, +0.6 basis pointsSpain 10-year: 3.604%, +0.4 basis pointsItaly 10-year: 3.946%, -0.5 basis pointsThe major economic event in the U.S. session was the July CPI report, which came in largely as expected but showed another modest improvement in the year-over-year inflation measures.Headline CPI rose 0.1% month over month, matching expectations and rebounding from the -0.4% decline in June. On a year-over-year basis, CPI eased to 3.4% from 3.5%, also matching expectations.Core CPI rose 0.2% month over month, in line with expectations and up from 0.0% in June. The year-over-year core rate eased to 2.5% from 2.6%, its lowest level since February.The details showed housing costs remaining firm, with owners' equivalent rent and rent of primary residence both rising 0.3% (contributed 2/3 of the gain). Energy prices fell 1.5%, including a 2.9% decline in gasoline prices. Airfares rose 2.2%, medical care increased 0.4%, and used-car prices rose 0.4%.The report did little to strengthen the case for a September Fed rate hike. The market is now pricing in around a 40% probability of a September hike, down from 44% ahead of the CPI release.That has helped push U.S. Treasury yields lower, led by the shorter end of the curve, which is more sensitive to changes in Fed expectations:2-year yield: 4.191%, -2.7 basis points5-year yield: 4.361%, -2.5 basis points10-year yield: 4.668%, -1.6 basis points30-year yield: 5.233%, -0.2 basis pointsU.S. stocks are also trading higher as European traders head home. The gains are being led by technology, with the Nasdaq and Nasdaq 100 outperforming, while the Dow is little changed:Dow Industrial Average: +0.02% at 53,807.37S&P 500: +0.19% at 7,742.51Nasdaq Composite: +0.41% at 26,553.61Russell 2000: +0.33% at 3,037.00Nasdaq 100: +0.72% at 29,736.59In the foreign exchange market, the U.S. dollar is modestly lower but mixed overall, after earlier declines, fizzled out. EURUSD is little changed (-0.03%) near 1.1537, GBPUSD is marginally higher (+0.01%) at 1.3506, and USDJPY is down slightly (-0.03%)at 159.24. AUDUSD is up 0.10% at 0.7067 (higher USD). The NZD is the weakest of the major currencies, with NZDUSD down 0.27% (lower USD) at 0.5863.Gold is one of the bigger beneficiaries of the softer rate outlook, rising around $50 to $4,421. Technically, gold has moved back above its 100-day moving average at $4,393.19, putting the buyers more firmly in control. Staying above that moving average keeps the focus on the 200-day moving average at $4,485.55 as the next major upside target.Crude oil prices are trading at $83.18 near unchanged on the dayOverall, European equities are ending the day modestly lower, while the early U.S. tone is more constructive. The CPI report was largely in line with expectations, but the easing in the annual headline and core readings has reduced the perceived need for the Fed to tighten in September. That is contributing to lower Treasury yields, a modestly softer dollar, higher U.S. equities and another strong session for gold. This article was written by Greg Michalowski at investinglive.com.

Westpac is looking for another leg lower in the US dollar and suggests selling the Dollar Index on a break of 99.40.The bank highlights 99.40 as key support over the past two months and would sell a downside break, targeting 98.00 with a stop at 99.90. Westpac said a benign July CPI report along with convincing steps towards reopening the Strait could provide the catalyst but we haven't seen that this week.The important point is that this isn't a live short yet. They're waiting for the technical break rather than trying to front-run it.Elsewhere, Westpac is sticking with its long GBP basket, a trade it entered on July 10 on the idea that the UK's "governability risk premium" could compress. The basket is long sterling against the US dollar, euro, Swiss franc and Swedish krona, with the largest weighting against EUR. The target is 105 from a 100 entry, with a stop at 98.That's an interesting way to frame the sterling trade because it's less about a booming UK economy and more about removing a political discount that had been embedded in the currency.Westpac is also watching AUD/NZD closely around 1.2000. Attempts to break lower in both July and August failed and the latest move higher has been helped by the RBA's hawkish stance. Momentum now points towards 1.2100-1.2200 and Westpac says that could be worth a tactical long.However, the larger bias remains to sell a convincing downside break in AUD/NZD. For that to happen, Westpac says Australian-New Zealand yield spreads will probably need to extend the declining trend that's been in place for six months.There isn't much on the immediate NZ calendar ahead of the September 2 RBNZ decision, while Australia has July employment next week and CPI the following week.So the three takeaways from Westpac are fairly clean:Sell DXY below 99.40, targeting 98.00Stay long GBP against a regional basketAUD/NZD could squeeze to 1.2100-1.2200, even though Westpac ultimately still likes the idea of selling a convincing break lowerThe DXY trade is the one that stands out. A break of 99.40 would put the dollar back through an area that's repeatedly held over the past couple of months and, if the fundamental backdrop cooperates, there's not much in Westpac's way before 98.00. This article was written by Adam Button at investinglive.com.