US Credit Mkt Wk Ahd: PPI, CPI, Fed Speak And Tariff Angst

     CHICAGO (MNI) - Generally quiet in the week ahead, aside from Treasury

supply, data focus on Wednesday's PPI (0.2% est) and Thursday's CPI (0.2%)

followed by multiple Fed speakers through the week, with the Semiannual monetary

policy report to Congress released late Friday morning.

     Treasury supply in the week ahead starts off Monday ($48B 13-week and $42B

26-week, both end 1130ET). The U.S. Treasury will auction $33B 3Y notes on

Tuesday, $22B 10Y notes on Wednesday and $14B 30Y bonds on Thursday (notes/bond

auction close at 1300ET).

     On data, Morgan Stanley economists expect June PPI to rebound (0.3%) after

core PPI for May came out below "expectations in May, rising just 0.1% for the

second consecutive month." On Thursday's CPI, MS looks for core CPI "to rise

0.18% in June following 0.17% in May, in line with what we see as the trend

through the end of 2018."

     Credit Suisse economists "expect core CPI to increase by 0.18% in June,

keeping YoY inflation at 2.2% (although it is very close to rounding up to

2.3%). Headline CPI should rise by 0.2% as well. Due to an easy base comparison,

this would lift YoY inflation further to 2.9% from 2.7%."

     RBC economists "anticipate a 0.2% gain in both the headline and core

measures of consumer inflation in June. This will take year/year headline CPI to

a multi-year high of 2.9% and core CPI to a 22-month high of 2.3%."

     With the next media blackout for the Federal Reserve still a couple weeks

away (Saturday, July 21 through August 2, day after the next FOMC policy

announcement), Fed speaker events kick off with Minneapolis Federal Reserve Bank

President Neel Kashkari Monday morning (0910ET) giving welcome remarks for the

"Homeownership in Indian Country: Creating the Opportunity for Choice"

conference in Prior Lake, Minnesota.

     New York Federal Reserve Bank Executive Vice President Simon Potter speaks

at the FX Week USA 2018 in New York Wednesday (0955ET), "Spotlight on the Global

Code of Conduct", with audience Q&A.

     New York Federal Reserve Bank President John Williams follows up later

Wednesday (1630ET) a Brooklyn Town Hall, with audience Q&A.

     On Thursday (1215ET), Philadelphia Federal Reserve Bank President Patrick

Harker will participate in a conversation at the Global Interdependence Center,

Tenth Annual Rocky Mountain Economic Summit in Victor, Idaho, with audience Q&A.

     Thursday evening (2000ET), Minneapolis Federal Reserve Bank President Neel

Kashkari will discuss immigration at the Worthington International Festival

Immigration Panel Discussion, with audience Q&A.

     Rounding out the week, Atlanta Federal Reserve Bank President Raphael

Bostic will participate in a town hall chat Friday (1230ET), at the Northern

Chapter Virginia Society of Certified Public Accountants in Falls Church,

Virginia, with audience Q&A.

     The Federal Reserve will release chairman Powell's Semiannual monetary

policy report to Congress at 1100ET Friday, July 13, four days ahead of

testimony to Senate on the July 17. Historically, the report was released at

same time of testimony, generating a bit more excitement as market scrambled to

take it all in at once.

     Last year, Janet Yellen's final testimony as Fed chair was scheduled to

testify before the House Financial Services Committee at 1000ET (1400 GMT) on

July 12. While her prepared remarks were released the same day at 0830ET, the

semiannual monetary policy report was released five days prior on July 7, giving

public ample opportunity to digest.

     Meanwhile, trade wars officially underway as of midnight Thursday when the

Office of US Trade Representative (USTR) slapped an additional duty of 25% on

approximately $34B worth of Chinese imports while tariffs on $16 billion worth

of Chinese imports may still be issued. 

     Largely priced in, markets showed little reaction Friday. However, markets

remain susceptible to additional headlines and the potential for unintended

negative consequences for the economy that will take longer to develop.

     Capital markets VP Karl Haeling for Landesbank Baden-Wurttemberg said any

"bearish impact" of tariffs, Haeling said "has been limited by hopes that the

U.S. and the EU will avoid a $300 billion auto-related trade war, and that Trump

and Xi Jinping will avoid escalating the tariffs between them by an additional

ca. $600 billion by the end of the year."

     Risk asset investors may also take comfort "that the direct GDP impact from

current and new U.S.-China tariffs Friday is limited," Haeling said. "Economists

see a growth reduction of only about 0.1 percentage point on each country from

this. And even in the event of significant broadening down the road, it may not

add up to much more than about 0.5 percentage point."

Calendar of next week's market events (prior, estimate): 

- Jul 09 Mn Fed Pres Kashkari, "Homeownership in Indian Country: Creating

Opportunity for Choice" conf, Prior Lake, Mn, 0910ET

- Jul 09 Jun ETI 1000ET

- Jul 09 Jul NY Fed expectations survey 1100ET

- Jul 09 May consumer credit (10.6, 15.5) 1500ET

- Jul 09 Jun Treasury Allotments (final) 1500ET

- Jul 10 Jun NFIB Small Business Index (107.8, --) 0600ET

- Jul 10 07-Jul Redbook retail sales m/m  (-0.4%, --) 0855ET

- Jul 10 May JOLTS job openings level (6698k, --) 1000ET

- Jul 10 May JOLTS quits rate (2.3%, --) 1000ET

- Jul 10 US TSY $33B 3Y note auction, Jul 16 settle, 1300ET

- Jul 11 06-Jul MBA Mortgage Applications 0700ET

- Jul 11 Jun Final Demand PPI (0.5%, --) 0830ET

- Jul 11 Jun PPI ex. food and energy (0.3%, 0.2%) 0830ET

- Jul 11 Jun PPI ex. food, energy, trade (0.1%, 0.3%) 0830ET

- Jul 11 Fed NY Exec VP Potter, "Global Code Conduct", FX Wk, NY, Q&A. 0955ET

- Jul 11 May wholesale inventories (0.1%, --) 1000ET

- Jul 11 May wholesale sales (0.8%, --) 1000ET

- Jul 11 Jul Atlanta Fed inflation (2.1%, --) 1000ET

- Jul 11 06-Jul crude oil stocks ex. SPR w/w 1030ET

- Jul 11 Jun Kansas City Fed LMCI (0.83, --) 1100ET

- Jul 11 US TSY $22B 10Y note auction, Jul 16 settle, 1300ET

- Jul 11 NY Fed Pres Williams, Brooklyn Town Hall, Q&A, 1630ET

- Jul 12 07-Jul jobless claims (231k, 226k) 0830ET

- Jul 12 Jun CPI (0.2%, 0.2%) 0830ET

- Jul 12 Jun CPI Ex Food and Energy (0.2%, 0.2%) 0830ET

- Jul 12 08-Jul Bloomberg comfort index (57.6, --) 0945ET

- Jul 12 06-Jul natural gas stocks w/w 1030ET

- Jul 12 Phi Fed Pres Harker, Global Interdependence Center, Id, Q&A, 1215ET

- Jul 12 US TSY $14B 30Y bond auction, Jul 16 settle, 1300ET

- Jul 12 Jun Treasury budget balance (-$146.8B, --) 1400ET

- Jul 12 11-Jul Fed weekly securities holdings 1630ET

- Jul 12 Mn Fed Pres Kashkari, Worthington Int, Immigration Panel, Q&A. 2000ET

- Jul 13 Jun imports price index (0.6%, 0.3%) 0830ET

- Jul 13 Jun exports price index (0.6%, --) 0830ET

- Jul 13 Jul Michigan sentiment index (p) (98.2, 98.7) 1000ET

- Jul 13 Monetary Policy Report to Congress release (testimony Jul 17), 1100ET 

- Jul 13 Q3 StL Fed Real GDP Nowcast 1100ET

- Jul 13 Q3 NY Fed GDP Nowcast 1115ET

- Jul 13 At Fed Pres Bostic, town hall chat Northern Chapter Virginia Society of

Certified Public Accountants in Falls Church, Virginia, with audience Q&A.

1230ET

--MNI Chicago Bureau; tel: +1 312-431-0089; email: bill.sokolis@marketnews.com

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

[TOPICS: MTABLE,M$U$$$,M$$FI$,MN$FI$,MN$FX$]