*

European shares rise towards early June all-time peak

*

Soft German and Spanish inflation data knocks euro

*

Key part of U.S. Treasury curve close to un-inverting

*

Gold nears record high

*

Graphic: World FX rates http://tmsnrt.rs/2egbfVh

*

By Marc Jones

LONDON, Aug 29 (Reuters) - European shares shrugged off

Wall Street's disappointment at 'Magnificent 7' top dog Nvidia's ( NVDA )

results on Thursday, while the euro and bond yields fell as a

stream of German and Spanish inflation data trickled in soft.

With a 0.7% gain on the board ahead of the Wall Street

restart, the pan-European STOXX 600 index was pushing

to regain the record highs it set in mid-June before being

savagely hit in a global rout earlier this month.

A near 1% rise in the region's tech shares led the way as

traders swerved Wednesday's 7% after-hours slump in AI darling

Nvidia's ( NVDA ) shares on Wall Street after its results had

left some investors unenthused.

Despite a third-quarter revenue forecast of $32.5 billion

surpassing analysts' expectations, its second-quarter revenue

outperformance was the smallest relative to forecasts in six

quarters.

Wall Street did still look set to open higher later,

but "this wasn't the sort of massive beat that Nvidia ( NVDA ) has often

reported over the last 18 months," Deutsche Bank strategist Jim

Reid said.

There were plenty of other things for traders to digest,

though.

The benchmark gauge of European borrowing costs, the German

10-year Bund yield, and the euro had both fallen after

data from six key German states pointed to a noticeable decline

in the national inflation rate this month.

Spain's annual inflation rate dropped to 2.4% too, its

slowest pace in a year, and U.S. weekly jobless claims, which

have gained prominence given the Federal Reserve's focus on the

health of the labour market, are also due later in the day.

Asian markets had a tricky session overnight. MSCI's

broadest index of Asia-Pacific shares outside Japan

fell 0.3%, with South Korea's and

Taiwan's markets dropping 1% and 0.7% respectively as

their big chip and tech stocks felt the Nvidia ( NVDA ) chill.

"Nvidia ( NVDA ), in some ways, has become a victim of its success,

its share price soaring over 180% this year and after beating

earnings now in 14 of the past 15 quarters," said Tony Sycamore,

analyst at IG.

Whether the results "signal the end of investors' strong

affinity for the chipmaker remains to be seen. However, at the

very least, the post earnings reaction does suggest it's an

excellent time to consider diversifying," he added

China's blue chips ended lower for a fourth

session as disappointing results from Chinese companies

highlighted the country's frail economic recovery. UBS on

Wednesday cut its 2024 GDP growth forecast for China to 4.6%

from 4.9%.

China's central bank also bought up special government bonds

for the first time in nearly two years, with the bank's governor

also saying separately that it planned to look at new measures

to boost the economy.

Geopolitical disputes were in play too. Chinese battery

maker CATL fell over 1% after two top Republican

lawmakers sought to have the firm added to a restricted list of

companies allegedly working with Beijing's military.

U.S. National Security Adviser Jake Sullivan is wrapping up

three days of talks in Beijing intended to ease simmering

tensions between the two superpowers.

Beijing had also said on Thursday that it would not impose

provisional tariffs on brandy imported from the European Union,

fanning hopes Europe in return might soften its pressure on

China's electric car makers.

GOING FOR GOLD

Currency markets saw the euro swoon back below $1.11

following the German and Spanish inflation data, having failed

to break a major resistance level of $1.12 in recent days.

There was a gaggle of key central bankers speaking too,

including ECB Chief economist Philip Lane and Fed Atlanta

President Raphael Bostic.

Bostic on Wednesday said it may be "time to move" on rate

cuts, but that he wanted to see confirmation from the jobs

reports and two inflation reports before the September meeting.

The dollar steadied above more than one-year lows,

undermined by expectations of imminent Fed rate cuts. Futures

have fully priced in a quarter-point cut next month, and even

imply a 35% probability of a half-point easing.

The second estimate of second-quarter U.S. GDP is also due

later and though backward looking it will include the latest

revisions to core PCE inflation, Deutsche Bank's Reid

highlighted.

"Any revisions to that would add to the uncertainty when it

comes to tomorrow's core PCE print for July, so that could have

implications for the 25 bps vs 50 bps (Fed cut) debate depending

how that looks," he said.

U.S. Treasury yields were mostly quiet, although the

inverted curve between two- and 10-years came within a whisker

of turning positive. That would be the first time since July

2022, barring the brief un-inverting during the Japanese market

crash earlier this month.

Gold climbed again and was just shy of notching another

record high. Spot prices were up 0.6% at $2,522 an ounce,

just a touch below their record of $2,531.

Oil was battling to avoid a third straight day of declines,

meanwhile, as concerns about demand from China and the U.S.

countered supply disruptions out of Libya.

Brent crude futures bounced in and out of the red

near $78.50 a barrel having fallen more than 3% in the past two

days, while U.S. West Texas Intermediate crude hovered

around $74.50 futures dipped 0.5% to $74.18.