Fed Chair Warsh’s appearance at the ECB’s annual Central Bank forum in Sintra, Portugal (Wednesday) and Thursday’s June employment report headline this week’s holiday-shortened economic calendar. We expect Chair Warsh will keep his cards close at the Sintra meeting, similar to the post FOMC press conference, deflecting pointed questions by deferring to the five task forces currently being assembled. The more important signal will be how he frames recent developments in the Middle East and the decline in crude oil prices. On the June NFP, we expect 75k headline no with unemployment rate at 4.3%. Lead indicators for the labor market have remained steady, but the fading impact of temporary factors that boosted hiring in May likely points to a softer June print. On the inflation side, BEA has announced future changes to its methodology to estimate certain key PCE price components, including portfolio management and investment advice services, legal services, and computer software and accessories. The net impact from those changes has the potential to lower y-o-y core PCE inflation by 20-30bp. Those changes will take effect on 30 September 2026, along with annual revisions to the national account data. In other US macro data this week, we have JOLTS, ISM manufacturing & consumer confidence. There is no supply of dated USTs this week. On policy front, we expect the Fed to keep policy on hold in REMCY26, with inflation developments posing risks to potential rate hikes. There are no Fed speakers lined this week hence Warsh's speech on 1st July & NFP data on 2nd July might drive the markets. In RoW data this week, we have Eurozone HICP inflation data this week along with likely comments from UK PM-in-waiting Burnham.
