Gold falls below $1,910 as ECB forum concludes

Central banks

After three days of central bank speeches at the European Central Bank (ECB) forum in Sintra, the market can agree that rates have not yet peaked, and cuts won't come for some time.

For Federal Reserve chair, Jerome Powell, "Policy hasn't been restrictive enough for long enough."

ECB president, Christine Lagarde is not "seeing enough tangible evidence of the fact that underlying inflation, particularly domestic prices, are stabilising and moving down."

Andrew Bailey was somewhat more cautious. The Bank of England (BoE) governor said the bank would "do what is necessary" but it remained to be seen if market bets would prove correct. "They've got a number of further increases priced in for us," Bailey added. "My response to that would be: 'Well, we'll see.'"

In Australia, retail sales rebounded last month. Retail sales rose 0.7% in May month-on-month (MoM), beating forecasts of a 0.1% increase. Year-on-year (YoY), sales were up 4.2%. This consumer resilience is not what the Reserve Bank of Australia (RBA) wanted to see. The RBA is set to decide on its rates next Tuesday.

Prior to this retail sales data, Futures implied a 27% chance of a 25-basis point hike. It is now up to 36%. And three of the four major domestic banks are counting on an increase.

Macroeconomics

There is more to come on the macroeconomic front today.

In Germany, the consumer price index (CPI) is forecast to rise by 6.3% in June YoY, accelerating from the 6.1% recorded the previous month, and supporting the ECB's opinion that the fight against inflation is far from being over.

In the US, we'll get the final reading of US first quarter (Q1) gross domestic product (GDP) growth rate. Economists anticipate a 1.4% growth quarter-on-quarter (QoQ). Initial jobless claims are forecast to rise by 265,000.

A bit later at 3pm, pending home sales are seen falling 0.5% MoM, -17% YoY.

Equities

Elsewhere on the equity market, Micron Technology shares rose in extended hours after the chipmaker's third quarter earnings and sales beat expectations. Micron posted a loss of $1.43 per share, compared to expectations of a loss of $1.59. Revenue came in at $3.75Bln. Analysts had anticipated $3.67Bln.

For Micron CEO, "The recent acceleration in the adoption of generative AI is driving higher-than-expected industry demand for memory and storage for AI servers, while traditional server demand for mainstream data centre applications continues to be lacklustre". The market also noted an improvement in pricing trends as excess inventory continues to shrink, suggesting that the industry has now passed the bottom for growth and revenue.

One major problem subsists. Micron is stuck in the middle of a US-China technology spat. Last month, China's cyberspace regulator failed Micron's products in a security review and barred purchases by operators.

Another all-session stock is due to report tonight after the US closing bell: Nike. The Street expects earnings of 68 cents per share, or revenue of $12.58Bln. But more than earnings, it is an update of the group's strategy that interests investors. Nike has made a big case of squeezing out the middleman wholesaler and opting for direct-to-consumer business. Last quarter, direct-to-consumer revenue representing 42% of the company's total revenue.

China is another concern for investors. It is a huge market for the brand, and many expected a solid rebound in sales at the reopening of the country. That hasn't happened. Last quarter revenue in the region only rose by 1%.

Commodities

US crude stocks fell more than expected last week. An increase in crude oil exports sent crude inventories down 9.6 million barrels.

Gasoline stocks rose by about 600,000 barrels. Distillate stockpiles rose by 100,000 barrels.

WTI and Brent rose on the news, roughly recouping the losses that triggered on Tuesday and Wednesday by central bankers.