Mohamed El-Erian Says Inflation Data Dominates Global Economy, Markets This Week: Here Are Key Main Street Readings To Watch Out For

The economic calendar of the unfolding week is dominated by price data and Federal Reserve speeches. These are first-tier data/events that have the potential to move the market.

What Happened: Noted economist Mohamed El-Erian mirrored the sentiment in a tweet this weekend. "The week ahead for the global economy and markets will be dominated by inflation data, and to a lesser extent, the start of the US corporate earnings season," he said.

With some recent data vouching for the economy's strength, the inflation data could be the final piece of economic evidence that could play a big role in the next Fed move.

The policy-setting arm of the Federal Reserve is set to meet for 2 days on July 25-26 to discuss its next monetary policy move. The futures market has priced in a 92.4% probability of a 25 basis point move to 5.25%-5.50%.

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Here's the schedule for the key economic data/events:

Wednesday will see the release of the consumer prices report for June, with the month-over-month change of the headline consumer price index expected at 0.3%, faster than the 0.1% increase in May. Core consumer prices may have increased at a slightly slower pace of 0.3% compared to the 0.4% growth in May,

The consensus forecasts for the annual rate of June consumer and core consumer prices are at 3.1% and 5%, respectively. This compares to the 4% and 5.3% rates recorded for May.

The report, released by the Bureau of Labor Statistics, will be out at 8:30 a.m. EDT.

The Fed is scheduled to release its Beige Book at 2 p.m. EDT on Wednesday. The report provides anecdotal evidence of economic conditions in the 12 Federal Reserve districts.

The BLS is due to release its producer price inflation report on Thursday at 8:30 a.m. EDT. The headline PPI is expected to have increased by 0.2% month-over-month and 0.4% year-over-year in June. This compares to May's 0.3% drop and 1.1% growth, respectively.

The core PPI monthly rate is expected to remain unchanged at 0.2% and its annual rate may have ticked down from 2.8% to 2.7%.

The Labor Department will release its weekly jobless claims report, also on Thursday, at 8:30 a.m. EDT. The number of individuals claiming unemployment benefits is expected at 249,000 in the week ended July 8 compared to 248,000 in the week ended July 1.

On Friday, the BLS will release its export and import prices report for June at 8:30 a.m. EDT.

Also on Friday, the University of Michigan is due to release the preliminary consumer sentiment index for July at 10 a.m. EDT. The headline index may have increased from 64.4 in June to 65.5. The report also provides data on forward inflation expectations.

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Fed speakers due to make public appearances include:

• San Francisco Fed President Mary Daly, a member of the Federal Open Market Committee: Monday, 10:30 a.m. EDT
• Cleveland Fed President and FOMC member Loretta Mester: Monday, 11 p.m. EDT
• Atlanta Fed President and FOMC member Raphael Bostic: Monday, at 12 p.m. EDT
• St. Louis Fed President James Bullard: Tuesday, at 9 a.m. EDT
• Minneapolis Fes President and FOMC member Neel Kashkari: Wednesday, at 9:45 a.m. EDT
• Mester: Wednesday, at 2 p.m. EDT.
• Fed Governor Christopher Waller: Thursday, at 6:45 p.m. EDT

Photo by International Monetary Fund on Flickr