US PREVIEW: The US Macro Week Ahead: FOMC Minutes Eyed For Hike Appetite

• RES 4: 1.4292 61.8% Retracement Feb’25 - Jan’26 downleg
• RES 3: 1.4264 1.618 proj of the Mar 9 - 31 - May 1 price swing
• RES 2: 1.4248 High Jun 24, 25 and 30 and the bull trigger  
• RES 1: 1.4190 High Jul 9  
• PRICE: 1.4042 @ 20:48 BST Jul 15
• SUP 1: 1.4025 Low Jul 15
• SUP 2: 1.4013 50-day EMA
• SUP 3: 1.3951 Low Jun 15
• SUP 4: 1.3899 Low Jun 10

The USDCAD trend theme is unchanged, it remains bullish, however, a corrective cycle is in play and this week’s sell-off reinforces this theme. The pair has breached the 20-day EMA and attention turns to the next important support at 1.4013, the 50-day EMA. A clear break of this average would signal scope for a deeper retracement. A reversal higher would refocus attention on the bull trigger at 1.4248, the Jun 24, 25 and 30 high.

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• June’s inflation data was substantially softer than expected, providing a modicum of relief after a string of hot reports.
• The CPI report saw almost all major categories come in below expectations, with headline of -0.42% M/M below the -0.2% expected and the lowest since April 2020 as the Y/Y rate fell to a 3-month low 3.53% from 4.25% prior.
• Energy was as expected the main driver of downside to headline CPI, at -5.7% M/M, with food also largely in line at +0.2%.
• Meanwhile, core had its first negative print since May 2020 (-0.02% M/M) with Y/Y down to a 4-month low 2.59% from 2.85% prior.
• The surprise swing into sequential deflation in core CPI was driven by a surprisingly sharp pullback in core services inflation, which saw its joint-lowest print (0.03% M/M) since May 2020. Supercore was also surprisingly negative, helped by a drop in lodging prices among other factors.
• Core goods CPI was soft by almost any measure in June, coming in line at -0.09% vs MNI median 0.0% and -0.11% in May. Bigger picture: core goods prices have barely risen in 2026 so far (up 0.06%) and have risen an average 0.07% M/M over the last 12 months, despite the expected upside impact from tariffs and the latest energy price shock.
• Additionally, MNI’s measures of inflation breadth showed further cooling.
• June's PPI report echoed CPI in showing an unexpectedly sharp slowdown in sequential pressures vs May. Pipeline inflation remains elevated but is showing signs of having peaked.
• Headline final demand PPI came in at -0.3% M/M vs 0.0% expected and came with a large downward revision to May (0.6% vs originally-reported 1.1%), as ex-food/energy/trade services printed a 6-month low 0.1% M/M after a 50-month high 0.8% prior.
• Analysts now eye core PCE of between 0.17-0.19% M/M for the month with a median in our 5-analyst sample of 0.175%, below the 0.18% M/M prior to PPI and well down from vs 0.27% M/M before CPI.
• It’s only one month, as Chair Warsh reminded us following the CPI release ("There might be some that look at this morning's data and say, 'Oh, mission accomplished. Everything is swell. That is not my view.") and substantially more evidence will be required for the FOMC to back off its recent hawkish shift.
• Nonetheless Fed hike expectations progressively faded first through the data releases, with futures now implying 38bp of hikes through the June 2027 FOMC, versus 52bp prior to this inflation round.
• The more immediate implication was to all but price out a July hike, which looked like a 50/50 proposition following Gov Waller’s hawkish comments Monday but which now is seen with under 20% probability.

• RES 3: 133.32 - High Mar ‘26
• RES 2: 130.66 - Low Jan 21 
• RES 1: 128.19/42- 50-dma (cont) / High Jun 15 
• PRICE: 128.12 @ 20:25 BST Jul 15
• SUP 1: 126.27 - Low May 20
• SUP 2: 125.70 - Low Feb 1999
• SUP 3: 121.49 - 50.0% retrace of the 1990 - 2020 major bull leg 

A bearish theme in JGB futures remains intact despite the latest strong recovery. A resumption of weakness would expose 126.27, the May 20 low, where a break would confirm a continuation of the primary downtrend. Key near-term resistance has been defined at 128.42, the Jun 15 high. Clearance of this hurdle would instead signal a possible short-term reversal and highlight a potential break of the 50-dma - at 128.19.