US CPI Looms as Fed Hike Odds Surge to 75%

Markets now focus on Wednesday’s US CPI release after stronger-than-expected May payrolls shifted attention back to inflation risks. The week opened with OPEC+ set to approve a modest 188k bpd July increase and oil supported by Middle East supply concerns. Headline CPI is forecast to climb to 4.2% y/y while core edges to 2.9%, a hotter print that could push Treasury yields and the dollar higher. The ECB is expected to deliver its 25bp hike, yet attention will center on growth downgrades, while the Bank of Canada is likely to hold at 2.25% amid recession signals. Overall, upside inflation surprises threaten risk assets and reinforce dollar strength.