Economic calendar: Inflation day

Summary:
- UK inflation in June seen unchanged at 2% YoY
- Canadian price growth expected to decelerate significantly
- Oil traders wait for DOE report after yesterday’s steep declines

9:30 am BST - UK, CPI inflation for June. The labour market report released yesterday showed that the UK wage growth has accelerated to 3.4% YoY, the fastest pace in 11 years. Nevertheless, the British pound failed to rally on the news and remained at multi-month lows against the US dollar. Today’s inflation print will be another chance for the GBP to recover but price growth would need to accelerate beyond the expected 2% YoY.

10:00 am BST - Euro area, CPI inflation for June. The European CPI reading scheduled for today will be the second release for June. However, given that the final data from the member countries did not show any major surprises, one may expect CPI inflation to remain close to the 1.2% YoY signalled by the preliminary print.

1:30 pm BST - Canada, CPI inflation for June. The Canadian price growth remained robust in the past few months and saw an acceleration from 1.4% YoY in January to 2.4% YoY in May. However, a significant deceleration is expected in June as the reading is forecasted to show a decline to 2% YoY. The Bank of Canada is not biased to make any monetary policy adjustment anytime soon therefore the reading may have just a short-term implications.

3:30 pm BST - DOE report on oil inventories. API reading released yesterday showed a drop of 1.4 million barrels in crude oil inventories. The market expected a drop of 3.3 million barrels therefore the reading can be seen as a disappointment. Negative price reaction on the oil market yesterday was magnified by Trump’s threat of imposing new sanctions on China. Today’s DOE report could help regain some of the yesterday’s weakness but a drop bigger than the expected 3.4 million barrels would be required.

Central bankers’ speeches:
- 6:30 pm BST - Fed’s George