INSTITUTIONS: NEXT WEEK, THE FED OFFICIALS WILL BE SPEAKING IN AN INTENSIVE MANNER, AND ATTENTION WILL NEED TO BE PAID TO THEIR INTERPRETATION OF THE CPI DATA AND THEIR POTENTIAL INTEREST RATE INCREASE

ON 11 JULY, THE DEUTSCHE BANK INDICATED THAT, AFTER WEEKS OF QUIETER STATEMENTS BY FEDERAL RESERVE OFFICIALS, THE WEEK WOULD BE MARKED BY AN INTENSE PRE-QUIET WAVE. OF THE GREATEST CONCERN: WALLER'S SPEECH AT THE NEW YORK BUSINESS ECONOMICS ASSOCIATION TOOK PLACE ON MONDAY, PRESIDENT WALSH TESTIFIED ON TUESDAY AND WEDNESDAY, AND SEVERAL OFFICIALS WILL GIVE OUTLOOKS AFTER THE CPI DATA RELEASE IN JUNE (COOK WEDNESDAY, VICE-PRESIDENT JEFFERSON, LOGAN OF THE DALLAS RESERVE AND SCHMIDT OF THE KANSAS CITY RESERVE). WALSH IS EXPECTED TO REITERATE HIS RECENT STATEMENT AND REMAIN SILENT ON FUTURE POLICY ACTIONS. WALLER, ON THE OTHER HAND, USUALLY PREFERS TO ELABORATE ON HIS POLICY RESPONSE MECHANISMS AND EXPECTATIONS, SO HIS REMARKS WILL BE CLOSELY FOLLOWED TO CAPTURE ANY SIGNALS OF HIS POLICY ORIENTATION. WITH REGARD TO OUTLOOK STATEMENTS, WE WILL FOCUS ON HOW OFFICIALS INTERPRET THE INFLATION FIGURES FOR THIS WEEK AND WHETHER OFFICIALS ARE INCLINED TO INCREASE INTEREST RATES IN JULY. AS THE MINUTES OF THE JUNE MEETING SHOWED, “A FEW” OFFICIALS FELT THAT THERE WAS REASON TO INCREASE THE INTEREST RATE LAST MONTH. SINCE THEN, THE SITUATION HAS BEEN MIXED, AS OIL PRICES AND INFLATION ARE EXPECTED TO FALL, BUT HAVE SINCE REBOUNDED IN PART, AND UNEMPLOYMENT RATES HAVE DECLINED FURTHER, NOT EXCLUDING DISSENTING VOTES IN SUPPORT OF THE INTEREST RATE HIKE AT THE JULY MEETING. KIM XIAN