In the coming week, the economic calendar will be dominated by key price data releases and Federal Reserve speeches, which have the potential to significantly impact the market.
Renowned economist Mohamed El-Erian echoed this sentiment, highlighting that inflation data and the start of the US corporate earnings season will be the key focus for the global economy and markets.
“The week ahead for the global economy and markets will be dominated by inflation data, and to a lesser extent, the start of the US corporate earnings season,” he said.
Given the recent indications of economic strength, the inflation data will play a crucial role in shaping the Federal Reserve’s next monetary policy move. The Federal Reserve’s policy-setting arm is scheduled to meet for two days on July 25-26, and the futures market has already priced in a 92.4% probability of a 25 basis point adjustment to a range of 5.25%-5.50%.
Here’s the schedule of important economic data and events for the week:
- On Wednesday, the consumer prices report for June will be released, with expectations of a 0.3% month-over-month increase in the headline consumer price index, compared to a 0.1% rise in May. Core consumer prices are expected to have grown slightly slower at 0.3% compared to a 0.4% increase in May. The consensus forecasts for the annual rate of consumer and core consumer prices in June stand at 3.1% and 5%, respectively, compared to the rates of 4% and 5.3% recorded in May. The Bureau of Labor Statistics will release the report at 8:30 a.m. EDT.
- On the same day, at 2 p.m. EDT, the Fed will release its Beige Book, which provides anecdotal evidence of economic conditions in the 12 Federal Reserve districts.
- The producer price inflation report from the Bureau of Labor Statistics is scheduled for Thursday at 8:30 a.m. EDT. The headline PPI is expected to show a 0.2% month-over-month increase and a 0.4% year-over-year growth in June, compared to a 0.3% decrease and 1.1% growth, respectively, in May. The core PPI is anticipated to remain unchanged at 0.2% monthly and show a slight decline from 2.8% to 2.7% on an annual basis.
- On Thursday at 8:30 a.m. EDT, the Labor Department will release the weekly jobless claims report, with expectations of 249,000 individuals claiming unemployment benefits for the week ending July 8, compared to 248,000 for the previous week.
- Friday will see the release of the export and import prices report for June by the Bureau of Labor Statistics at 8:30 a.m. EDT.
- Also on Friday, the preliminary consumer sentiment index for July will be published by the University of Michigan at 10 a.m. EDT. The headline index is expected to show a slight increase from 64.4 in June to 65.5, providing insights into forward inflation expectations.
Several Federal Reserve speakers are also scheduled to make public appearances throughout the week, including Mary Daly, Loretta Mester, Raphael Bostic, James Bullard, Neel Kashkari, and Christopher Waller.
These upcoming events and data releases will be closely monitored by market participants as they seek insights into the direction of monetary policy and potential market movements.