Week Ahead for FX, Bonds: U.S. Inflation Data in Focus as Prospects of Fed Rate Hike Increase

Global markets are set to trade the U.S. inflation outlook closely in the week starting June 22, with expectations for a potential Federal Reserve rate hike rising. The key focus is May U.S. PCE inflation data, due Thursday, after the Fed left rates unchanged at its June meeting but signaled a rise was possible by year-end. U.S. money markets have fully priced a quarter-point hike in October, and LSEG data show that scenario was previously priced as late as March 2027. In addition, flash purchasing managers’ surveys for June are due Tuesday, followed by data including durable goods orders, jobless claims, GDP (final), new home sales, and the University of Michigan survey. The U.S. Treasury will auction $69 billion of two-year notes, $70 billion of five-year notes, and $44 billion of seven-year notes.