Week Ahead: Latest US CPI Amid Summer Markets

It’s that time of year when markets gradually kick into summer trading sessions, which means lighter liquidity and volumes as desks at investment banks and funds see senior traders head to vacations and more junior staff take over. Gaps can open up where tradeable prices used to be, which can often result in all different types of assets from stocks and currencies to crypto and bonds swinging around based on little to new information. From experience, there may be a lot of head scratching over the next few weeks trying to figure out why certain price action is taking place, before more normalised market behaviour takes place post-summer.

The latest US inflation data is likely the biggest risk event this week, which should ease some concern about the Fed potentially hiking rates this year. The FOMC was split down the middle in terms of its June projections of whether it would likely hike rates or not with nine members on each side. However, sharp falls in gasoline prices should mean headline CPI falls month-on-month. Core should stay steady, though that is still above target and has been for five years and counting. We will get to hear from new Fed boss Warsh who returns to Congress on Tuesday to explain his views. Slowing housing rents, weaker wage growth and a diminishing influence from tariffs are expected to dampen inflation concerns further out.

Stocks will be watching the Q2 earnings season which commences in earnest this week as roughly 30 S&P500 firms will release, starting with the usual focus upon financials. Tuesday will be the big bang with Goldman Sachs, Bank of America, JP Morgan, Citigroup and Wells Fargo all reporting. Wednesday then brings out Blackrock, Morgan Stanley, and Bank of New York Mellon. A few other names over the rest of the week will include GE and Netflix on Thursday. So far for the season, revenues have exceeded expectations by just over 3%, while earnings have beaten expectations by 13%. That points to earnings season kicking of on a very strong footing.

In Brief: Major Data Releases of the Week

Tuesday, 14 July 2026

US CPI: June headline inflation is forecast to print at -0.1% m/m and 3.8% y/y from 0.5% and 4.2%, respectively. Core, which strips out volatile food and energy prices, is seen unchanged at 0.2% and 2.9%. Lower gasoline prices will drive the headline metrics, but core may get a lift from World Cup price hikes in travel, hotel and hospitality. The DXY still trades around the 100-week SMA and above the March 2026 high at 100.43.

Wednesday, 15 July 2026

China data: Q2 GDP is forecast at 4.5%, down from the prior 5% due to weak domestic demand and ongoing challenges in the real estate sector. Retail sales are expected to improve but remain soft, while industrial production is seen weaker. Subdued data could see more stimulus.

Bank of Canada Meeting: The BoC is expected to keep rates steady at 2.25%. Benign inflation figures, mixed jobs data and muted business surveys are expected to keep policymakers on hold for a sustained period. Middle East and trade-related uncertainty also mean a patient stance is likely. USD/CAD dipped for the first week in five, with strong resistance at 1.4248.

Thursday, 16 July 2026

US Retail Sales: Consensus expects the headline to print at 0.3%, ex autos at 0% and the control group at 0.5%. Lower gasoline prices should depress the value of sales but further out, should ease the squeeze on consumers’ spending power. 

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