Markets Eye US CPI and Warsh Testimony as Q2 Earnings Season Begins

Key Facts

Global markets are bracing for a pivotal week as the US inflation report and Kevin Warsh's testimony emerge as primary drivers for the US Dollar. According to reports, analysts do not expect the Bank of Canada to follow the Reserve Bank of New Zealand's lead in hiking interest rates. Simultaneously, Wall Street is preparing for the start of the Q2 earnings season, with a particular focus on concerns surrounding the valuation and growth sustainability of the AI sector.

This anticipation follows US ISM Services PMI data which held steady at 54 as of July 6, 2026, signaling resilience in the services sector despite ongoing inflationary pressures. In contrast to the expected stability in Canada, the Reserve Bank of New Zealand raised its interest rate to 2.5% on July 8, 2026, per market data, creating a divergent backdrop for commodity-linked currencies.

Traders should closely watch the upcoming US CPI release for clarity on the Federal Reserve's next moves. Kevin Warsh's testimony also stands as a key catalyst that could trigger volatility in bond and currency markets. In the absence of current instrument pricing, the broader market outlook remains tied to the initial wave of Q2 corporate earnings, which will likely dictate risk sentiment in the coming days.