Analysts expect reports this week to add to evidence the U.S. economy is strengthening, which would bolster the case for Fed Chair Janet Yellen and her board to raise borrowing costs sooner.
Economists in a Bloomberg survey predict retail sales rose 1.2 percent in May, while the producer price index gained the most since 2012. The University of Michigan’s index of sentiment rose in June, based on a separate survey.
“There’s probably a mental high-fiving between Yellen and other Fed members,” said Minh Trang, a senior foreign-exchange trader at Silicon Valley Bank in Santa Clara, California. “You can see the reaction was almost immediate with the dollar and other Group of 10 counterparts. September rate hike is almost certain at this point.”
Fed fund futures give a 53 percent probability that the central bank will lift rates in September, up from 46 percent before Friday’s jobs report, according to data compiled by Bloomberg.