Spanish Flash CPI and US Dallas Fed Index in Focus
Spanish Flash CPI is expected to show a slight cooling in headline inflation, while the US Dallas Fed Manufacturing index is forecast to tick higher, with focus shifting to this week's US NFP report.
The European session on Monday brings the Spanish Flash CPI report as the main data point. Headline CPI year-on-year is expected to ease to 3.0% from 3.2% prior, while the harmonized index (HICP) is seen at 3.4% versus 3.6% previously. The gradual cooling in headline inflation reflects lower energy prices, though core measures may remain stickier.
For interest rate traders, the Spanish print is a precursor to euro-area inflation data later this week. A softer reading would reinforce expectations that the ECB can proceed with rate cuts, while an upside surprise could delay the easing cycle. The market reaction is likely muted given the low tier of the release, but any deviation from forecasts could still influence short-term rate expectations. For current pricing on eurozone government bonds and rate derivatives, check NowPrice's rates page for real-time yields and swap spreads.
Looking ahead, the focus this week is squarely on the US nonfarm payrolls report. Before that, the US Dallas Fed Manufacturing index for June is due later today, expected to tick up to 1.0 from 0.4 prior. This indicator is rarely market-moving, but it offers a glimpse into regional manufacturing conditions. Traders will also watch for any Fed commentary and the evolving rate path as the market prices in the next policy moves.