The macro docket’s not exactly “crowded” this week, but there’s enough on the schedule to keep things a modicum of interesting.

A CPI update out of the US (on Wednesday) is obviously the marquee event. Consensus expects 0.3% from the MoM core reading, which is the only print that really matters for traders who’ll parse it out to at least two decimals.

As a reminder, core CPI overshot for three consecutive releases, which is to say every Q1 MoM print on the core gauge surprised to the upside.

A deceleration to a 0.3% pace would be the first downshift in the month-to-month rate in six releases.

It bears mentioning that 0.3% is far too warm if the Fed really does intend to restore price stability as they (arbitrarily) define it. The YoY pace is seen downshifting to 3.6%, still a mile above target. We’re not going to get to 2% YoY with 0.3% MoM prints.

In addition to “regular” core, traders will parse the CPI-derived “supercore” measures, although the Fed doesn’t consult those. Jerome Powell’s supercore metric comes from the PCE data. That’s not due until May 31. PPI data covering April, due Tuesday, will provide some clues about the PCE prices release.

“For the last three months, the consensus forecast for core CPI has been +0.3% and the realized figures have been +0.4% [but] before concluding that April’s data risks doing the same and erring on the side of pattern recognition, we’ll offer [that] it was the rounding that ruined the day,” BMO’s Ian Lyngen and Vail Hartman noted, before adding a word of caution: “The unrounded supercore numbers were a bit more concerning at +0.681% March, +0.502% February and +0.701% January, [a] trend [which] undermines the argument that it was simply a January spike that moderated throughout the quarter; hence, the relevance of Wednesday’s data.”

A cool (or even a consensus) read on core CPI would contribute to the latest tone shift in the US macro narrative. Although the Atlanta Fed’s GDPNow tracker still suggests the economy’s outperforming dramatically, the context for this week’s inflation update is the headline NFP undershoot for April (and the accompanying cool read on average hourly earnings), contraction-territory ISMs, an uptick in initial jobless claims (distorted by a New York seasonal though it might’ve been) and flagging consumer sentiment.

To recycle some language from the latest Weekly, a benign read on core price growth this week would see market pricing for 50bps of rate cuts from the Fed in 2024 firm up. Traders could then start looking for an excuse to build in some “extra” cut premium (i.e., some odds of a third cut), even as the June dot plot will almost surely see the 2024 marker shift higher to (i.e., to Fed will probably remove one of the three cuts tipped by the last two SEPs).

Retail sales figures due out at the same time as the CPI release are expected to show nominal spending was steady in April, albeit slower than the prior two months. Recall that the last two retail sales reports were very robust.

Plainly, an undershoot would help make the gradual deceleration case, while another blockbuster would once again suggest the incorrigible American consumer remains… well, incorrigible.

Other notables out of the US this week include NAHB, housing starts and remarks from Jerome Powell, among half a dozen other Fed speakers.

Overseas, the most consequential release comes Friday, when Beijing will release activity data covering April.