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What to Watch

US TSYS
  • Treasury futures drifting near late overnight highs (10s +9.5 at 111-18, yield 3.9443%), carry-over support in the lead-up to June CPI release at 0830ET.
  • Consensus puts core CPI inflation at 0.3% M/M in June as it slowed from a modest beat of 0.44% in May. There is no evidence that the downside miss in nonfarm payroll gains last Friday has deterred FOMC participants from signaling their preference to raise rates twice more this year.
  • An above-expected print and/or a report with strong details in ex-shelter services would reinforce the "higher for longer" theme; a miss most impactful for September pricing.
  • Several Fed speakers scheduled today include: Richmond Fed Barkin right at 0830ET (no text or livestream, however). Followed by MN Fed Kashkari (0945ET), Atlanta Fed Bostic (1300ET) and Cleveland Fed Mester (1600ET).
  • Later this afternoon: Federal Reserve Releases Beige Book release at 1400 as well as Senate Banking Cmte Fed nominations markup.
  • Looking ahead, June PPI released tomorrow (0.2% est vs. -0.3% prior final demand MoM, 0.4% YoY vs. 1.1% prior), UofM sentiment on Friday.

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