CPI, Industrial production, more Chinese Treasury outflows, and a few surveys.
8:30: Consumer Price Index (May): Slower headline growth. We forecast a 0.14% (mom) increase in the May CPI, with risks likely skewed to the upside (due to strong food and import prices). We forecast a 0.16% (mom) increase in the core, down from 0.19% in April. Among the major components, we expect slightly slower vehicle inflation, partially offset by faster growth in apparel and rent-related prices.
On headline, GS: +0.14%; median forecast (of 79): +0.1%; last +0.42%.
On core, GS: +0.16%; median forecast (of 79): +0.2%; last +0.19%.
8:30: Empire Index (June): Roughly unchanged? Last month the Empire State index did not decline as dramatically as some of the other regional manufacturing surveys. Our research suggests this may be because the index is less sensitive to changes in auto production. This month, forecasters expect a roughly unchanged reading.
Median forecast (of 52): +12.0; last +11.9.
9:00: TICS net inflows (April).
Median forecast (of 5): +$35bn; last +$24bn.
9:15: Industrial production (May): Too soon for auto rebound. Cuts in motor vehicle output held back the index of industrial production in April. Manufacturer reports suggest that overall vehicle production likely increased slightly in May (on a seasonally adjusted basis), as gains among the Big Three offset further declines in production from the major Japanese automakers’ US operations. However, the level of auto production should still be significantly below the Q1 average. A larger rebound in vehicle output looks unlikely until the June and July reports.
On production, GS: +0.3%; median forecast (of 79): +0.2%; last 0.0%.
On capacity utilization, GS: 76.9%; median forecast (of 68): 77.0%; last 76.9%.
10:00: Housing Market Index (June): Likely still low.This index remains in the mid teens, where it has been for most of the past three years.
Median forecast (of 42): 16; last 16.
11:00: $4-5 billion 12/31/2016 - 05/31/2018 POMO; As this is to the right of the Bill Gross proposed "rate cap" interval except the OTR QQ6 to be heavily monetized
No Fed Speeches: The traditional press blackout period in advance of an FOMC meeting is now in effect. Fed officials will be out of sight between now and the June 21-22 discussions.
From GS, SMRA, ZH