Tuesday's Market Minute: A Busy Week Ahead

Let's take a market minute to establish a few things traders and investors should stay dialed in on this week. First and foremost, inflation concerns remain front and center. They’re weighing on the indices and are a big part of what’s behind the U.S. dollar reaching new 20-year highs.

Fed Chair Jerome Powell is doing his part to slow inflation: he’s clamping down the demand side of things through raising rates. This week, focus will be on President Biden and his efforts to bring down inflation through the supply side; we could hear something more definitive in terms of plans to roll back some of the Trump-era China tariffs. If so, it could ease some of the pressure stocks have been under.

While rates here in the U.S. have pulled back some, the 10-year yields (TNX) are back below 3%. As mentioned, the U.S. dollar remains at multi-decade highs as the euro, the yen, the Aussie dollar, and the pound weaken.

Keep a close eye on the U.S. dollar this week as it tries to break above 106 – keep in mind that the dollar is an inverse correlation of a basket of currencies. Traders are gearing up for what’s going to be a busy month of July for central bankers, with the FOMC and the ECB at the top of the list of closely-watched players

This week, we’ll also be keeping an eye on economic data as we await the jobs report on Friday. We have Motor Vehicle Sales, Factory Orders, the PMI and manufacturing data, Fed Minutes, and Wholesale Inventories between now and the end of the week. But most of the attention will be on the monthly labor report as investors and traders gauge the impact, if any, higher rates are having on hiring.

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