Last week was was a bit lacking in terms of trading days due to the holiday market closure, but it made up for that with bigger-ticket data and events on Friday.  This week is a bit lacking in terms of scheduled economic data, but it will make up for that by offering another top tier release in the form of CPI (the "consumer price index").

CPI is the most important inflation data there is, based on the market's willingness to react to it.As far as potential reactions are concerned, traders are on the lookout for a break above 2.3% in CORE y/y CPI.  That's as high as it has been since before the Great Recession and it's the forecast for this week's report.

There's a longstanding thesis--especially among academic market participants--that stronger job growth results in higher inflation.  Specifically, it's strong job growth that pushes wages higher which, in turn, turn the crank for inflation.  The only issue there is that wage growth has been frustratingly light compared to past recoveries.  As for now, it's unclear that we've seen quite enough of an uptick in wages to suggest we're ready to see the post-crisis inflation ceiling broken. 

If we do happen to see a 0.2% "beat" in core CPI (taking the total to 2.4%), it would almost certainly make for a bad day in the bond market.  Anything lower than that makes the trading reaction much less certain.  After all, even bonds have shown quite a bit of willingness to overlook econ data in favor of trade war fears.  To that end, if there are any meaningful trade-related headlines this week,they could easily take the spotlight.

Apart from the CPI data, there's really not much else for bonds to sink their teeth into this week.  Wednesday's Producer Price data sounds similar enough to CPI to be important, but it's not.  Friday is also a relative dud with data that's 2nd tier on a good day.  The worst offenders, however, are the first 2 days of the week.  It wouldn't be at all unfair to say that there's nothing interesting on tap as far as the calendar is concerned.  Interestingly enough, it's occasionally those kinds of days where big moves end up happening.  In other words, we're entitled to lament the calendar, but not to assume it connotes an absence of risk.