U.S. CPI inflation likely increased by 0.2% in July

U.S. CPI for July and the FOMC Minutes are seen as the main macro highlights today. 

"A +0.2% m/m rise in headline CPI, as the declines in the wholesale energy complex have not flowed through to the consumer space. For core prices, we estimate a +0.2% m/m increase (+1.9% y/y) as rents," says RBC Capital Markets in a research note. 

News on reinvestment plans will be important for MBS spreads. And there is still uncertainty about the RRP. Presumably, the total size is unlimited at the first rate hike, but the current counterparty limits will create an effective cap. 

"As for the FOMC Minutes, we don't expect them to yield much in the way of a September start to tightening, but we will be looking closely at more on tightening mechanics", adds RBC Capital Markets.