Mohamed El-Erian Says Inflation Data Will Dominate Global Economy And Markets This Week: Here Are The Key Readings To Watch For

The economic calendar for the coming week will be dominated by price data and Federal Reserve Talk. These are prime data/events that have the potential to move the market.

What happened: Well-known economist Mohamed El Erian reflected the sentiment in a tweet this weekend. “The coming week will be dominated by inflation data and to a lesser extent by the start of US corporate earnings season for the global economy and markets,” he said.

With some recent data showing the strength of the economy, the inflation data could be the last piece of economic evidence that could play a big role in the Fed’s next move.

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The Federal Reserve’s monetary policy arm will meet for two days on July 25-26 to discuss its next monetary policy move. The futures market has priced in a 92.4% chance of a 25 basis point move to between 5.25% and 5.50%.

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Here is the schedule for the major economic dates/events:

The consumer price report for June will be released on Wednesday. The monthly CPI change is expected to come in at 0.3%, faster than the 0.1% rise in May. Core consumer prices may have risen slightly more slowly at 0.3% from May’s 0.4% growth.

Consensus forecasts for annual consumer and core consumer price inflation in June are 3.1% and 5%, respectively. This compares to rates of 4% and 5.3% recorded in May.

The report, released by the Bureau of Labor Statistics, will be released at 8:30 a.m. EDT.

The Fed is expected to release its beige book at 2:00 p.m. EDT on Wednesday. The report provides anecdotal evidence of the economic situation in the 12 Federal Reserve districts.

The BLS is scheduled to release its producer price inflation report Thursday at 8:30 a.m. EDT. June headline PPI is expected to have risen 0.2%m/m and 0.4% y/y. This contrasts with a decline of 0.3% and growth of 1.1% compared to May.

The monthly core PPI rate is expected to remain unchanged at 0.2% and the annual rate may have fallen to 2.7% from 2.8%.

The Labor Department will also release its weekly jobless claims report Thursday at 8:30 a.m. EDT. The number of people filing unemployment benefits is expected to be 249,000 in the week ending July 8, compared to 248,000 in the week ending July 1.

On Friday at 8:30 a.m. EDT, the BLS will release its June export and import price report.

Also on Friday at 10 a.m. EDT, the University of Michigan will release its preliminary consumer sentiment index for July. The composite index is likely to have risen to 65.5 from 64.4 in June. The report also includes data on future inflation expectations.

READ ALSO: Larry Summers says Fed must hike rates enough for economy to eventually suffer a downturn: ‘It’s a mistake to get distracted by volatility’

Fed speakers making public appearances include:

• President of the San Francisco Fed mary daly, a member of the Federal Open Market Committee: Monday 10:30 a.m. EDT
• President of the Cleveland Fed and FOMC member Loretta master: Monday 11:00 p.m. EDT
• Atlanta Fed President and FOMC member Raphael Boštic: Monday, 12 p.m. EDT
• St. Louis Fed Chairman James Bullard: Tuesday, 9 a.m. EDT
• President of Minneapolis Fez and FOMC member Neel Kashkari: Wednesday at 9:45 a.m. EDT
• Mester: Wednesday at 2:00 p.m. EDT.
• fed governor Christopher Waller: Thursday at 6:45 p.m. EDT

Photo by the International Monetary Fund on Flickr

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