WEEK AHEAD: US inflation, Infrastructure & Debt Ceiling

Prepare for trading markets over the next five days with the FlowBank Week ahead report:

There is a series of inflation data expected: the consumer price index and the producer price index, released Wednesday and Thursday, respectively. Jobs and inflation are two key factors that influence the Federal Reserve in making its decisions on policy. Markets are hanging on anything that will help determine when the central bank will start to step away from the measures it took to support the economy during the pandemic, including its $120 billion per month purchases of Treasury bonds and mortgage-backed securities.

The Fed has said elevated inflation, running over 5% at the consumer level recently, is just temporary. Economists polled by Dow Jones expect another hot reading for the consumer price index, with core inflation rising 0.4% or 4.3% year over year. The CPI is released Wednesday. Headline inflation was at 5.4% in June, and core, excluding food and energy, was at 4.5%.

The economic boost from an expected $1 trillion infrastructure bill working its way through the U.S. Senate has helped push Wall Street stocks near record levels, but some investors are concerned that the next two months in Washington could be rocky.

At issue is not only the bipartisan infrastructure bill, but an expected $3.5 trillion in proposed spending in a Democrat-led reconciliation bill. There is also a showdown coming over the debt ceiling, which could lead to a federal government shutdown if a deal is not reached to increase the borrowing limit by October.

CALENDAR


MONDAYEarningsViatris, BioNTech, Barrick Gold, Air Products, AMC Entertainment, CF Industries, Planet Fitness, Elanco Animal Health, U.S. Foods, 3D Systems, Ethan Allen, Tegna

Macro

Asia: China CPI, China PPI

Europe: GermanyTrade Balance

Monetary PolicyN/A

TUESDAYEarningsSoftBank, Coinbase, Sysco, Chesapeake Energy, Super Micro, WW International, Casper Sleep, Aramark

MacroEurope: Germany: ZEW Economic Sentiment Index
US: US Nonfarm Productivity Prel

Monetary PolicyN/A

WEDNESDAYEarningseBay, Wendy’s, Perrigo, Lordstown Motors, Opendoor Technologies, Nio, Rackspace, Vroom, Marqeta, Sonos, Bumble

MacroEurope: Germany CPI Final
US: US CPI

Monetary PolicyN/A

THURSDAYEarningsWalt Disney, Baidu, Airbnb, CyberArk Software, Azek, Palantir Technologies, DoorDash, SoFi

MacroAsia: Japan PPI
Europe: UK GDP Prel Q2, UK Manufacturing Production, EZ Industrial Production, 
US: US PPI, initial jobless claims

Monetary PolicyTurkey Interest Rate Decision

Mexico Interest Rate Decision

FRIDAYEarningsN/A

MacroAsia: Australia Employment Change (JUL)
Europe: EZ Trade Balance
US: Canada PPI, Michigan cosnumer Sentiment

Monetary Policy

N/A

 

Sources: CNBC, Fox Business, Bloomberg, Investing.com, FX Street

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