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Steady Ahead Of US CPI

GOLD

Gold is slightly higher in the Asia-Pac session, after closing 0.6% lower on Wednesday. The move was surprisingly large considering the USD index moved lower on the day.

  • That said, short-end US tsy yields were higher. Nervousness over the potential for stronger-than-expected US CPI data today, which could keep the FOMC on a tightening path, appeared to encourage some position squaring. See the MNI CPI preview here.
  • Core inflation is expected to fall, extending a downward trend that Bloomberg consensus believes will support a pause in monetary tightening when the Fed next meets in September. The market attaches a 17% chance of a 25bp hike at the 20 September FOMC meeting.

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