If there were only one statistic to remember from the past week, it would be the US CPI. Coming in at +4.8% vs. 5.0% annualized (excluding food and energy), it eclipsed all other macroeconomic data and relegated the Bank of Canada's 25 basis point hike to the status of mere news. Gone are the inflation fears. Out with the monetary tightening. So, yes, 92% of investors are still betting on a July hike. However, only 12.9% believe that the Fed will raise rates again in September! Is it time for the long-awaited pivot? The Core PPI, at +2.4% versus +2.6% expected, reinforces this sentiment. And while all bets are still on, a look at the price action on bonds is enough to show that bets are well underway.

(Source: Bloomberg)

U.S. 2-year and 5-year yields stumbled on their March and October highs at 4.46% and 5.08% respectively. The 21-day moving average was breached, marking a change in momentum. Looking further ahead, we're beginning to dream of a double-top formation on the short side, which would fuel the rise in indices and gold, while pushing the dollar down a little further (see dedicated article). All we can do now is wait for the Fed's speech on July 26 to confirm all these good news and see if the terminal rate is finally reached. In the absence of any last-minute bad news, the summer stock market weather looks set to be sunny.