Today, we delve into key economic indicators like the Consumer Price Index (CPI) and Producer Price Index (PPI), evaluate the Federal Reserve’s upcoming meeting, and discuss other significant events that could affect the markets.

Inflation on the Radar: CPI and PPI

The CPI kicks off this week’s market movers tomorrow and the PPI the next day. Both indices serve as crucial inflation indicators and set the tone right before the Fed meeting on Wednesday. The current headline CPI reading stands at 4.9%, and we anticipate this to come down to about 4.1-4.2%. Though not close to the Fed’s 2% target, the downward trajectory holds promise. Similarly, we’re forecasting a significant drop to mid-1% for PPI, which should cast a favorable light on the market.

The Federal Reserve Meeting and 10-Year Treasury Note Auction

The Federal Reserve meeting, commencing tomorrow and concluding with a key decision on Wednesday, is another event to watch out for. After ten successive rate hikes, the Fed is expected to skip this meeting, effectively extending the period to evaluate incoming data before their next projected rate hike on July 26.

Simultaneously, the 10-year treasury note auction scheduled for today is an event investors will keep a keen eye on. Its outcome could give an important indication of the bond market’s potential direction.

Retail Sales and Market Impact

On Thursday, the retail sales number is due for release predicted to be bond-friendly. This event and CPI, PPI, and the Federal Reserve’s actions will be critical in shaping the market this week.