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What to watch

MARKET INSIGHT
  • The main focus today will be on US retail sales. Yesterday, the Fed's Waller stated that the Fed probably needs to raise rates by 75bp this meeting, but he could support a larger hike if demand doesn't show signs of slowing. He noted that "We have important data releases on retail sales and housing coming in before the July meeting. If that data come in materially stronger than expected it would make me lean towards a larger hike at the July meeting to the extent it shows demand is not slowing down fast enough to get inflation down." And with those comments, today's retail sales data takes on added importance. We will also see Empire manufacturing and import / export price updates released simultaneously.
  • Later in the day we will then see industrial production data as well as Michigan confidence data -the inflation expectations component of the latter of particular interest.
  • In addition we will hear from the Fed's Bullard, Bostic and Daly.
  • Italian politics will be in focus after Draghi's resignation yesterday was rejected - with any headlines on futures elections or prospects of him continuing as PM likely to be watched by BTPs in particular.
  • UK politics should be on the back burner a little today, with the next round of voting in the race to be next PM not until Monday.

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