Disinflation (not in the US)

Daily update

Japan exhibited some disinflation with the June Tokyo consumer price data. Using the international definition of core inflation, the rate slowed to 1.8% y/y. A lot of the headline inflation seems to be driven by non-fresh food, perhaps suggesting relative price shifts rather than strong, broad inflation momentum.
France and Spain offer the flash estimates of June consumer price data. Both are likely to produce fairly stable headline rates. Goods prices are signaling disinflation (or in the case of France are comfortably showing outright deflation). This reflects expectations of a slowing US economy, and ongoing consumption shifts in favor of fun.
US May personal income and consumption data is due. There is likely some payback after consumers brought forward durable goods purchases ahead of trade taxes (that pattern was more Democrat than Republican consumers). The deflator will not show much impact from trade taxes yet—that will be looked for a couple of months hence.
US Trade Secretary Lutnick declared an agreement with China over trade. Markets do not care, as this seems to be just a codification of the agreement made in Geneva and reaffirmed in London. Lutnick promised ten trade deals were coming (no news on whether this includes the penguins of the Heard and McDonald Islands).