What are the main events for today?

The useful part

EUROPEAN SESSION In the American session, the main highlight was the UK jobs report. We don't have much for the rest of the session other than the Eurozone trade balance, which is not going to change anything for the ECB, so the market reaction will be muted. Headline CPI is expected to increase to 3.1% vs 2.4% prior, while the more important Trimmed-Mean CPI Y/Y is seen remaining unchanged at 2.2%.

How it works

• We recently got the Canadian employment report and the data showed once again a soft labour market.
• The central bank will likely be watching the Trimmed-Mean CPI for signs of spillovers.
• He's been worrying about the labour market but the data has been pointing to resilient conditions.
• What is more in tension now is inflation and if he switches his focus back to that, it might be taken as a signal of potential rate hikes.
• The data was mixed but leaning more on the weaker side.

What to take from it

I think it's worth highlighting it today because we are approaching the June FOMC meeting and it will contain the SEP and the dot plot. Governor Macklem stressed that while the Bank would be "looking through the war's immediate impact on inflation", if it spills into the broader economy, "there may be a need for consecutive increases in the policy rate". Fed's Waller has been a great "leading indicator" for Fed policy in this cycle and I think the market would react in a big way if he were to change his stance now.

Details worth keeping

Overall, it doesn't change anything for the BoE. AMERICAN SESSION In the American session, we get the Canadian CPI report. These meetings are generally more important for policy signals.