Good morning, traders,
Last week ended with a little more heat than expected, when the Trump administration sent a letter threatening a 35% tariff on Canadian goods.
That came right alongside a jab at Jerome Powell for spending taxpayer money on an “ostentatious” renovation in his Fed office.
No joke.
Politics and policy are colliding at full speed again. And it’s starting to matter for the tape because tariff threats and Fed drama both have teeth.
They shake investor confidence, they tweak inflation expectations, and they definitely move markets.
Traders who are paying attention to how markets are reacting to these headlines are going to have an edge this week.
Because it’s a week that’s fully loaded.
- Tuesday we get CPI.
- Wednesday: PPI.
- Thursday: Jobless claims and retail sales.
That’s four pieces of market-moving data in three trading days, plus several different Fed officials speaking throughout the day tomorrow.
And all of it comes with big implications for what the Fed does next, what the bond market does next, and where volatility goes.
Let’s do a quick prep for what’s ahead of us.
The Setup Into CPI (Tuesday)
Core CPI is what matters, and that’s why the Fed is watching it closely.
Markets are pricing in rate cuts for September, but if core CPI comes in hotter than expected, that narrative starts cracking.
Yields spike, tech gets hit, and we could see some real whipsaw action.
But if you’re trading options, this kind of binary setup gives you multiple ways to win.
You don’t have to guess the number — you trade the reaction.
If core CPI comes in cooler than expected, markets could rip higher, especially beaten-down names and high-beta growth.
But if it’s sticky? Watch out below.
Then Comes PPI (Wednesday)
Producer prices feed into consumer prices.
So if PPI shows rising costs at the production level, it can lead to higher consumer inflation down the road.
This release usually doesn’t get as much attention, but in this environment it’s a sleeper catalyst.
Remember: When everyone’s leaning one way (rate cuts), surprises the other direction can cause much bigger moves.
Thursday’s Double-Header: Jobless Claims + Retail Sales
Retail sales tell us if the consumer is still spending. Jobless claims tell us if the labor market is cracking.
These are the guts of the economy right now.
If both are strong, the Fed has zero urgency to cut. If both are weak? That’s a flashing yellow light for a slowdown.
In other words, Thursday could be a major macro inflection point.
If you’re an options trader, that’s exactly where you want to be.
No Rest for the Weary
One more thing: Political risk is officially back on the table.
Tariff threats, Fed attacks, campaign pressure — none of it is background noise. That stuff filters directly into rate expectations, dollar strength, and inflation outlook.
Don’t ignore it.
This week, you’ve got four major catalysts in a row, all tied to the same narrative: “Is the Fed cutting or not?”
That’s the trade. That’s where the money’s going to be made or lost.
So stay sharp. Be flexible. And don’t chase.
The market’s about to hand us a real opportunity. Let’s be ready to take it.
Stay street smart,
Jeff Zananiri
P.S. Speaking of opportunity, today at 10 a.m., join us for a live BNA webinar where we’ll break down how to spot and trade overnight power plays before the market even opens.
If you’ve been missing the early moves, this is your shot to finally get ahead of the game.
*Past performance does not indicate future results
