The key event next week is undoubtedly the Fed meeting on Wednesday. There is some disagreement in the market as to whether there will be hints of an earlier slowdown in QE or not: heightened inflation in May and actions by other central banks suggest that the Fed should use hawkish rhetoric, but the weak labor market report for two months in a row is strong counterargument. If the Fed does not give hints of tightening credit conditions, the search for the yield in the market should intensify, as the Fed is unlikely to announce turnaround decisions in the summer, so until September there will be no big news from the Central Bank.

Inflation in the US in May rose quite strongly - by 5%. However, the qualitative aspect of inflation will be clarified by the report on retail sales for May next Tuesday, it should be carefully analyzed, as it will affect expectations for the Fed meeting.

On Thursday and Friday, monetary policy meetings will be held by the Central Banks of Switzerland and Japan. Both economies faced heightened inflation in the second quarter, so they could join the growing chorus of hawkish banks, which already includes the Bank of Canada, Australia and England. The decisions to cut stimulus will come as a surprise, especially for the yen, but the Bank of Japan is unlikely to cut stimulus after years of ultra-low rates. It will probably try to drive inflation a little higher so that the population can feel what it means to live in an inflationary environment. CHF, JPY and USD will probably feel weak next week against currencies that either have a story of aggressive Central Banks (AUD, GBP, CAD) behind them or benefit from export of commodities, which prices continue to appreciate reflecting global expansion.