Bank of America Global Research previews the US July CPI report due on Wednesday.

"After a notably soft June CPI report, we expect the July CPI to print more in-line with recent trends, including 0.1% m/m in headline and 0.2% in core. We go into the data maintaining our call for 3 Fed hikes this year, even after last week's soft labor report. Overall labor conditions remain stable, with Fed's reaction function still skewed to the inflation side of the mandate," BofA notes.

"We expect US rates and the USD to react more to a downside print than to an equally sized upside print. While an upside print should put the Sept FOMC firmly in play, the decision would still likely hinge on August data, given Chair Warsh's apparent reluctance to hike. Conversely, a soft print would all but rule out a September hike and notably challenge market pricing of ~30bp of hikes through December. UST positioning and to a lesser extent USD positioning point marginally in this direction," BofA adds.