US Inflation Data and Earnings in Focus as Rate Hike Bets Remain High

The upcoming week will see a shift in focus from employment to inflation as the US releases key economic data. The July Consumer Price Index (CPI) is expected to rise 3.4% year-on-year, while core CPI is predicted to increase 2.5% year-on-year.

Market expectations are for a near 50-50 chance of a rate hike in September, which could change with inflation data. A strong CPI print could push the market to increase rate hike bets again, leading to higher Treasury yields and a stronger US dollar.

The US Bureau of Labor Statistics will release July PPI on Thursday, followed by retail sales on Friday. Both data points will test inflation and consumption trends.