Focus will be on inflation. The US figure is of particular interest ahead of Bernanke’s semi-annual testimony to the Congress tomorrow, see FT. Last week’s Fed minutes revealed that many participants ‘worried about the low level of inflation’ suggesting that inflation will also be an important determinant for Fed tapering. Bernanke’s dovish comment last week also touched upon inflation, as he said that low inflation and high unemployment signal that more Fed stimulus is needed. For CPI in June consensus is for an increase to 1.6% y/y from 1.4% in May. UK and euro area inflation could also get attention after ECB introduced forward guidance and Bank of England seems to be moving towards it.
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