This week's data is not insignificant, with the focus mainly on Wednesday's CPI. Let's briefly go over the schedule:
On Monday, at 22:00, there is wholesale sales data, followed by the New York Fed's inflation expectations at 23:00, which are mainly sentiment-driven and will not have a significant impact;
The real core is Wednesday night's CPI, which is the biggest turning point for the entire next week. The market has been dreaming of interest rate cuts, and if the CPI does not cooperate, this dream may have to be postponed until September before this news lands.
Following that, there will be Thursday's initial jobless claims + PPI, which can be seen as supplementary data;
Friday will wrap things up, looking at consumer confidence and one-year inflation expectations, which will help further set the market's direction for the third quarter.
The current issue is whether inflation can go down, entirely depending on how well the goods and services sectors perform. According to the Cleveland Fed's model estimates, May's CPI year-on-year may be 2.4%, slightly higher than last month's 2.3%, while the core CPI might remain unchanged at 2.8%.
What does this mean? The market has been overly optimistic about inflation retreating. If you are really counting on a rate cut in June, it will just be empty rhetoric.
The real window period seems to be in August or September, so don't be too anxious.
