USD Mixed, Awaits Fed Speak

At 1:00 AM Japan June Economy Watchers Diffusion Index (exp n/f, prev 46.8)
At 2:00 AM Germany May Trade Balance (exp 16.0 bln euros, prev 15.8 bln euros)
At 4:30 AM UK June core PPI m/m (exp 0.3%, prev 0.2%)
UK June core PPI y/y (exp 2.3%, prev 2.3%)
At 6:00 AM UK May Total Industrial Production m/m (exp 1.8%, prev –2.3%)
At 3:00 PM US May Consumer Credit (exp $6.0 bln, prev $2.6 bln)

The dollar is mixed against the majors at the start of the week, higher against the yen but mired near its lows versus the euro and sterling. The key driver in currency moves continues to be sentiment over the outlook for global interest rates, with the euro reaping the rewards for expectations of continued tightening from the ECB – propping the currency to near record highs against the dollar and yen.

The US economic calendar for the week ahead is light, consisting of wholesale inventories, business inventories, retail sales, trade balance, and the University of Michigan consumer sentiment survey. The key highlights will be speeches from Fed officials, including Chairman Bernanke, who discusses inflation with the NBER, Board member Plosser, who speaks about housing prices and policy, as well as from Board members Yellen and Kroszner. Markets will gauge the prospects for shift in Fed stance over the coming months. However, given the combination of recent economic data and commentary from Fed officials, the most likely scenario to materialize over the coming months will be an unchanged stance from the FOMC.