Highlights
US consumer price report due at 8:30 am ET is the day's main scheduled economic news event. The Econoday consensus looks for CPI up 0.5 percent on the month and up 4.2 percent on year for May. Those figures incorporate fuel prices which surged again during May. Excluding food and energy, CPI is expected up 0.3 percent and 2.9 percent on year.
There are lots of hopes that oil prices have peaked in May and that rising fuel costs will now start to wash out of inflation generally. Much depends on the outlook for oil to resume flowing through the Strait of Hormuz. Concern about inflation has prompted a hawkish repricing of the interest rate outlook with markets increasingly anticipating a 25 basis point rate increase from the Federal Reserve by year end.
Risk assets are extremely vulnerable to moves up in interest rates, as evident in the stock market drop after Friday's upside surprise in nonfarm payrolls and the follow-on jump in bond yields. An upside surprise on CPI could generate a similar painful reaction.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.