Rio Times Markets · The Week Ahead
Week Overview
This is the Warsh Fed’s first inflation teSt June CPI (Tuesday, 8:30 AM ET, cons. −0.1% MoM / ~3.9% YoY per BMO and Kiplinger) could deliver the first negative monthly headline in over a year — gasoline fell about 10% in June after the Iran peace talks eased Hormuz shipping risk. But as Kiplinger warns, do not let a negative headline fool you: core CPI (cons.
0.3% MoM) stays sticky at 2.9% year-over-year, and the Fed’s newly hawkish dot plot — a median of 3.8% with nine of 18 members projecting hikes by year-end — means Chairman Kevin Warsh is watching core, not the headline.
PPI (Wednesday, cons. 0.0% MoM vs 1.1% prior) confirms the energy-driven producer deflation, and the Bank of Canada decides the same day (cons. hold 2.25%).
The Beige Book (Wednesday, 2:00 PM ET) maps regional conditions in the oil shock’s aftermath, while retail sales (Thursday, cons. +0.3%) and the Philly Fed (cons. 12.1) measure demand.
Abroad, China’s Q2 GDP (Tuesday overnight, cons. +0.9% QoQ) tests the world’s second economy; UK monthly GDP (Thursday, cons. +0.1%) and euro-zone CPI final (Friday, cons. 2.8% YoY) round out the G7.
Michigan sentiment (Friday, cons. 51.4 vs 49.5) could mark the first improvement in five months.
Brazil delivers services (Wednesday), retail sales (Thursday) and IBC-Br (Friday); OPEC meets Monday and the Bank of Korea decides overnight Wednesday. There are no major market holidays — normal trading worldwide.
Three Themes That Will Define the Week
June CPI at −0.1% month-over-month would be the first negative print since early 2024 — but it is a gasoline mirage. Pump prices fell about 10% as Iran peace talks reopened Hormuz shipping lanes, per BMO’s Douglas Porter.
Strip energy out and core CPI sits exactly where it was in May, with shelter up 0.3%.
The Warsh Fed raised its 2026 median inflation forecast to 3.6% from 2.7%, and nine of 18 dots project hikes. This is not a committee that will celebrate a headline driven by cheaper gasoline.
Core PPI easing to 0.3% on Wednesday would be the first genuine good news on the cost pipeline.
The Bank of Canada (Wednesday, cons. hold 2.25%) faces CPI at 2.4% and a labour market showing strain — Governor Tiff Macklem needs clarity on whether the oil-shock pass-through has peaked. The Beige Book maps hiring, prices and output across all 12 Fed districts under the new Chair.
US retail sales (Thursday, cons. +0.3% vs. +0.9%) should decelerate as the gasoline surge that inflated spring spending reverses; the control group is the real signal. The Philly Fed and NY Empire State provide the July factory reads.
China’s Q2 GDP (cons. +0.9% QoQ vs. +1.3%) decelerating alongside industrial production and negative retail sales paints an economy struggling under property-sector weakness. UK monthly GDP tests whether the Q1 acceleration is holding, and euro-zone CPI final validates the ECB’s easing case ahead of July 16.
Michigan sentiment could mark the first improvement since February as falling gasoline lifts the mood. For Latin America, Brazil’s IBC-Br, services and retail data frame the Copom’s August meeting.
The Week at a Glance
01 Monday — July 13
OPEC sets the oil-price frame before Tuesday’s CPI. OPEC meets Monday and Brazil’s BCB Focus survey — the first since the June Copom — opens the Latin American week. India’s June CPI tests the RBI’s room to ease, while Fed governor Waller and ECB President Lagarde deliver their last remarks before their respective decisions.
02 Tuesday — July 14
CPI Day, and China’s Q2 GDP overnight. June CPI could print the first negative monthly headline in over a year, but it is a gasoline mirage; core at 2.9% is what the hawkish Warsh Fed watches, and five Fed speakers process the number in real time. Overnight, China’s Q2 GDP decelerates alongside negative retail sales.
03 Wednesday — July 15
PPI, the BoC, the Beige Book and Empire State. PPI confirms the energy reversal at the producer level. The Bank of Canada is expected to hold at 2.25%, the Beige Book is the first anecdotal survey of the Warsh era, and the Bank of Korea decides overnight.
04 Thursday — July 16
Retail sales, UK GDP and the Philly Fed. US retail sales should slow as the spring gasoline surge reverses; a negative core print would show the consumer pulling back beyond the energy math. UK monthly GDP is a key BoE input and Brazil retail sales test domestic demand.
05 Friday — July 17
EZ CPI final, Michigan sentiment and Brazil’s IBC-Br. Euro-zone CPI final is the ECB’s last input before July 16. Brazil’s IBC-Br is the Copom‘s GDP proxy for August, and Michigan sentiment rising above 50 for the first time since February would mark a consumer-confidence turn.
The Week in Context
Chairman Warsh’s first FOMC on June 17 redefined the landscape: a 130-word statement with no forward guidance, a dot plot showing nine of 18 members projecting hikes, and a median fed-funds forecast of 3.8%, up from 3.4% in March. The 2026 inflation forecast jumped to 3.6% from 2.7%.
May CPI printed 4.2% year-over-year with core at 2.9% — the energy component drove the headline while shelter and services stayed contained. June’s data flips the energy story: gasoline fell about 10% as Iran peace negotiations eased Hormuz transit risk, so the headline can turn negative even as core stays sticky.
Markets now price a quarter-point hike by December and zero cuts. Three central banks are in play — the BoC on Wednesday, the Bank of Korea overnight, and the ECB next week on July 16, with euro-zone CPI final arriving Friday as the last input.
The Bottom Line
Tuesday’s CPI will generate headlines about falling inflation. Ignore them.
The −0.1% monthly print is gasoline, and the Warsh Fed’s dot plot — nine of 18 members projecting hikes — tells you the committee is watching core, which holds at 2.9%. Headline inflation is mechanically declining as oil eases from the March peak near $118, while underlying pressure stays sticky enough to keep hike risk alive.
PPI on Wednesday confirms the energy reversal; retail sales on Thursday test whether consumers are spending less or just paying less for fuel; and Michigan on Friday could deliver the first sentiment improvement since February. For Latin America, Brazil’s IBC-Br on Friday is the Copom’s August input.
The oil shock may be fading. The inflation problem is not.
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