UPCOMING EVENTS:

• Tuesday: Canada CPI.
• Thursday: US Jobless Claims.
• Friday: EZ CPI, US Core PCE.

Tuesday:
The Canadian Headline CPI Y/Y is expected to come at 4.2% vs. 4.4% prior, while
the M/M reading is seen at 0.5% vs. 0.7% prior. The Core CPI Y/Y is forecasted
at 3.9% vs. 4.1% with no forecast for the M/M figure at the moment, although
the prior number was 0.5%. The BoC surprised with a rate hike at the last
meeting as they weren’t happy with the first quarter inflation and general data
trends. Stubbornly high or even higher data may tip the BoC into another hike
all else being equal.

Thursday:
The US Jobless Claims remain a key data point and a market mover every week as
the market and the Fed are particularly focused on the labour market. Initial
Claims have been missing expectations for a few weeks now, but Continuing
Claims kept on improving week after week. For this week Initial Claims are
expected at 264K vs. 264K prior, while Continuing Claims are seen at 1767K vs.
1759K prior.

Friday:
The Eurozone Headline CPI Y/Y is expected at 5.7% vs. 6.1% prior, while there
are no forecasts for the M/M figure as of now, although the prior number was
0.0%. The Core CPI Y/Y is seen at 5.5% vs. 5.3% prior and no expectations for
the M/M reading, although the prior number was 0.2%. There’s also the
Unemployment Rate being reported and expected at an unchanged 6.5% reading. The
ECB has made it pretty clear that a July hike is basically guaranteed unless
there’s a material change in the data, while the September hike is much more
debated and will depend on the data.

The US Core PCE Y/Y is expected at 4.7%
vs. 4.7% prior, while the M/M figure is seen at 0.4% vs. 0.4% prior. This data
is generally less market moving than the timelier CPI report and it shouldn’t
change much markets’ expectations given that we will have the NFP and another
CPI report before the next FOMC meeting. So, unless there’s a big deviation
from the expectations, it won’t be a big deal.

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