This week's important schedule overview

• Fed Chairman Powell will deliver semi-annual monetary policy testimony on Capitol Hill on Tuesday and Wednesday for two consecutive days.

Fed Chairman Powell will deliver semi-annual monetary policy testimony on Capitol Hill on Tuesday and Wednesday for two consecutive days. At that time, he may reiterate the need to further confirm that inflation is slowing down before cutting interest rates.

The June non-farm report showed that the US unemployment rate reached its highest level since the end of 2021, and other data also indicated that economic growth is weak. In view of this, some lawmakers may question Powell more strongly on why the Fed is hesitant to cut interest rates.

Refer to Powell's remarks last week. On July 2, he said at a central bank forum held by the European Central Bank that the Fed has made considerable progress on inflation. However, he also said that he hopes to see more progress before he has enough confidence to begin cutting interest rates. Powell refused to provide any specific information about the timing of the Fed's first rate cut.

• The June CPI and PPI data will be released in the United States on Thursday and Friday, respectively.

The June non-farm report in the United States showed signals of continued cooling in the job market, thus increasing the possibility of the Fed cutting interest rates in September. The June CPI data released on Thursday will further provide reference for the Fed's monetary policy trend, and the housing CPI is particularly worth paying attention to, as housing is a very tricky source of inflation and is seen as a major thorn in the Fed's eye.

It is expected that the overall CPI annual rate in June in the United States will fall from 3.3% to 3.1%, and the monthly rate will increase slightly to 0.1%; the core CPI annual rate and monthly rate will both remain at 3.4% and 0.2%, respectively.

Institutions believe that considering the price sub-indices of the ISM manufacturing and non-manufacturing PMI surveys have both declined, the risk of CPI may tilt towards the downside. Further slowing of inflation may convince more market participants to bet that the Fed will cut interest rates twice this year, putting pressure on the US dollar.

Jonathan Peterson, senior market economist at Capital Economics, said in a report on Friday that the US inflation data may strengthen the view that the Fed's interest rate hike cycle has ended and the potential upward risk of the US dollar no longer exists. On the contrary, the main risk facing the US dollar now seems to be economic weakness, and it may benefit from short-term bid if risk assets fluctuate.

However, the PPI inflation data released on Friday may release some worrying signals: the year-on-year growth rate of PPI is expected to rebound from 2.2% to 2.3%, and the month-on-month growth rate will rise from -0.2% to 0.1%.

Considering the transmission process from producer prices to consumer prices, the upward trend of PPI indicates that CPI data may continue to rise in the coming months.

Can US President Biden retain his candidacy for president?

• Biden still insists publicly that he will not withdraw from the election and is trying to reverse public opinion, but the effect is minimal, and Democrats are becoming more and more forceful in pressuring him to withdraw. Whether Biden can survive this crisis may be revealed.

Biden is still publicly insisting that he will not withdraw from the race and is trying to counter public opinion, but the Democratic Party is becoming increasingly vocal about "forcing him out". Whether Biden can survive this crisis may be revealed next week.

The Q2 earnings season for US stocks is about to begin, with PepsiCo announcing its results before pre-market trading on Thursday and JPMorgan and Citigroup announcing their results before pre-market trading on Friday.

• China will release June CPI and PPI data on Wednesday.

Zhejiang Securities chief economist Li Chao recently released a report stating that it is expected that the year-on-year growth rate of CPI in June will be 0.5% (previous value was 0.3%). With the gradual elimination of the drag factors of the "hangover", CPI is expected to rise moderately. With the warming weather and increasing supply, food prices will remain at a seasonal low. Industrial consumer goods are expected to rebound in demand under the policy of exchanging old for new, and prices may remain stable or slightly increase. On the other hand, service prices are expected to continue to rise under the push of gradually recovering demand for services.

• The institution also stated that it is expected that the year-on-year growth rate of PPI in June will be -1.2% (previous value was -1.4%), and the year-on-year decline in PPI may tend to narrow, and the prices of industrial products in the real estate chain are still dragging down, with the price of glass falling back month-on-month in May.

Powell will deliver semi-annual monetary policy testimony on Capitol Hill on Tuesday and Wednesday for two consecutive days.

The June CPI and PPI data will be released in the United States on Thursday and Friday, respectively.

The June non-farm report in the United States showed signals of continued cooling in the job market, thus increasing the possibility of the Fed cutting interest rates in September. The June CPI data released on Thursday will further provide reference for the Fed's monetary policy trend, and the housing CPI is particularly worth paying attention to, as housing is a very tricky source of inflation and is seen as a major thorn in the Fed's eye.

• June financial data for China may be released.

In addition to CPI and PPI, June's financial data on new loans, M2, and the total scale of social financing may be released (usually irregularly between the 9th and 15th of each month).

China Post Securities expects new credit in June to be 2.6 trillion yuan, social financing to grow by 8.1% year-on-year, and M2 to grow by 6.8% year-on-year. M2 growth continues to decline, financing demand remains weak, and pressure on the lending side is less than in previous years, or still maintains a small year-on-year increase. Bill rates were stable at the beginning of the month, significantly down in the latter half, and showed a "tail-up" trend at the end of the month, with a strong effect of supplementing bill size.

Zhejiang Commercial Securities stated that the current central bank emphasizes the balanced allocation of new credit, and the core appeal is to prevent the capital from being arbitrage-free. Looking forward to the second half of the year, it is expected that the matching degree of financial data and fundamentals will slightly improve. In terms of policy tools, the core depends on the trend of exchange rates and international balance of payments, the current RMB exchange rate still faces certain depreciation pressure, and China's international balance of payments still needs to be closely watched. Unlike interest rate cuts, the probability of a reserve cut is relatively higher, and the timing may consider matching the issuance pace of national bonds and local government bonds. In addition, from the perspective of reducing financing costs for the real economy, there is a high probability that LPR will continue to be guided downward.

This week's key performance calendar

Monday, July 8th

Keywords: Japan's Trade Account; US New York Fed 1-Year Inflation Expectations

On Monday, regarding economic data, investors can pay attention to Japan's trade account and the 1-year inflation expectations from the New York Fed in the US.

Tuesday, July 9th

Keywords: Powell's Semi-Annual Monetary Policy Testimony

On Tuesday, in terms of financial events, Federal Reserve Chairman Powell will deliver his semi-annual monetary policy testimony to the Senate Banking Committee, and investors need to pay close attention to this. In addition, Federal Reserve Board Member Bowerman was invited to speak at an event hosted by the Fed.

Wednesday, July 10th

Keywords: China's CPI, PPI; Powell's Semi-Annual Monetary Policy Testimony

On Wednesday, in terms of economic data, China will release CPI and PPI data for June.

In terms of financial events, Federal Reserve Chairman Powell will deliver his semi-annual monetary policy testimony to the House Financial Services Committee. In addition, Federal Reserve Board Member Bowmann will introduce the speech at an event hosted by the Fed.

Thursday, July 11th

Keywords: US CPI; US initial jobless claims for the week; PepsiCo performance

On Thursday, regarding economic data, the US will release CPI data for June and initial jobless claims for the week.

Regarding financial reports,$PepsiCo (PEP.US)$Earnings will be announced before pre-market trading.

Friday, July 12th.

Keywords: usa PPI; JPMorgan, Citigroup earnings.

On Friday, as for economic data, investors can pay attention to USA PPI for June and the initial Michigan consumer sentiment index for July.

Regarding financial reports,$JPMorgan (JPM.US)$and $Citigroup (C.US)$Earnings will be announced before pre-market trading.

Wishing Mooers a successful week of investment!

Editor/Jeffy