The U.S. economic calendar is quiet today but features some key data releases as the week progresses. The primary focus will be on Wednesday’s CPI report for July. Monthly Headline CPI is forecast to increase to 0.2% from June’s -0.1%. And Core CPI (excludes energy and food) is forecast to increase to 0.2% from the previous 0.1%. Headline Monthly CPI is estimated to stay unchanged at 3.0% and Yearly Core is forecast to drop to 3.2% from the prior 3.3%. So a mixed bag of expected results in close proximity to the recent trend.
U.S. Treasuries are in a holding pattern, trading near Friday’s closing levels. Yields in the long-term tenors are just slightly higher, led by the 20–30-year tenors with gains of 0.025%.
Is the Fed’s overnight rate going lower any time soon? Traders are pricing in a minimum of 25bps of cuts at each of the three remaining policy meetings this year, implying 4.315% by year end. And by March of 2026 the implied overnight rate drops to 3.116%.
The dollar’s spot returns are mixed against the G10 with a bias for dollar strength. The dollar’s leading gain is +0.84% vs. the Japanese yen, continuing to rally from last Monday’s low at 141.70. The dollar’s second leading gain is against the Swiss Franc, +0.46%. The combined lower JPY and CHF hint at a shift away from safe-haven assets.
Gold is +0.97%, trailing silver’s 1.39% gain. At $2,454.14 gold is inching towards its recent $2,483.73 all-time high from July 17th.
