Economic Outlook Shaped by Inflation Data: July 8-12 Economic Calendar

This week’s economic calendar focuses on inflation data, with Brazil releasing its June IPCA on Wednesday and the United States announcing its June CPI on Thursday.

Inflation figures significantly impact monetary policy expectations. Brazil’s financial market has been increasing year-end IPCA projections, suggesting inflation further from the 3% target.

The Central Bank’s Monetary Policy Committee (Copom) halted Selic rate cuts at 10.50%, citing this deviation.

The upcoming IPCA numbers could reinforce a negative interest rate outlook. This scenario implies that rates may not decrease soon and could even rise.

In the U.S., the key question is when inflation will reach a level allowing the Federal Reserve to ease monetary policy.

May’s inflation reading provided some relief. If June’s CPI data shows moderation, hopes for a rate cut at the Fed’s September meeting could increase.

Fed Chairman Jerome Powell’s speeches on Tuesday and Wednesday will also be crucial. Powell will address Congress, likely offering insights into future interest rate paths.

These speeches are essential for understanding the Fed’s stance amid changing inflation trends.

In addition to inflation, two critical Brazilian economic activity indicators will be released this week.

Retail data for May will come out on Thursday, and services sector data on Friday.

These indicators provide a broader view of the country’s economic health and are vital for market participants.

Despite a holiday in São Paulo on Tuesday, the stock exchange will operate normally. This ensures that market activities continue without disruption.

Politically, the Chamber of Deputies will vote on tax reform regulation. This vote is significant as it can influence Brazil’s economic landscape and investor sentiment.

Economic Calendar – July 8-12

Monday (July 8th):

• 08:25 AM: Focus Bulletin (Central Bank)

Tuesday (July 9th):

• Holiday in São Paulo: Stock exchange (B3) operates normally
• 11:00 AM: Jerome Powell’s speech to the U.S. Congress
• 10:30 PM: June inflation rate in China

Wednesday (July 10th):

• 09:00 AM: June IPCA/Inflation rate (IBGE)
• 11:00 AM: Jerome Powell’s speech to the U.S. House Financial Services Committee

Thursday (July 11th):

• 09:00 AM: May retail data (IBGE)
• 09:30 AM: June CPI/Inflation rate in the U.S.

Friday (July 12th):

• 09:00 AM: May services sector data (IBGE)

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