This Wednesday's CPI data and Thursday's PPI data are the most relevant, as they are the last two inflation reports before the Federal Reserve's FOMC meeting (the first in two months). The market expects the Federal Reserve to announce a rate decision, but more importantly, it will assess the U.S. economy, inflation, and short- to medium-term monetary policy.
Another potential source of volatility is Wednesday's 10-year Treasury auction. Although this event may seem unrelated, it could trigger significant fluctuations in the context of a declining bond market. Looking back at the last U.S. Treasury auction: weak demand led to a sharp rise in yields, causing a sudden drop in the stock market, and that trend also transmitted to the intraday price of Bitcoin.
Lastly, attention should be paid to the China-U.S. trade negotiations. Today, both sides will engage in a new round of discussions in London. If progress is limited, it may exacerbate short-term selling pressure (especially since the weekend market rally has partially priced in today's positive expectations). If positive signals regarding a trade agreement emerge, it would be beneficial for U.S. stocks and the dollar.
