Key takeaways:

• Traders will look closely at the latest inflation data in Australia and the US to form a better picture of the outlook for interest rates

The final week of the financial year sees inflation data take centre stage as investors become apprehensive about rate hikes and the risk of a recession, while developments in Russia will be monitored for any impact on safe-haven assets and commodities.

Economic Calendar and News

On home soil, the most prominent talking point is sure to be the latest monthly inflation indicator, due Wednesday. 

The data for May is expected to show a sharp drop in the rate at which prices for consumer goods and services increased. Forecasts suggest a reading of 6.0% is on the cards following the 6.8% increase seen in April. One of the key factors likely to be responsible for the improvement is a considerable decrease in petrol prices.

Should the inflation indicator meet expectations, it may provide the Reserve Bank of Australia more time to assess the impact of prior interest rate hikes before deciding whether further monetary tightening might be necessary. However, if inflation data surprises to the upside, there may be some pressure to continue hiking rates, just as Westpac, NAB, and ANZ expect at next week Board meeting.

On Thursday We'll be treated to retail sales figures for May. The data, which is expected to highlight the impact of rising interest rates, could also play a role in the RBA thinking. Economists anticipate a modest gain of 0.1% month-over-month in seasonally-adjusted terms. That same day there will also be fresh numbers covering job vacancies, with expectations that the jobs market cooled for the fourth straight quarter.In the US, the Federal Reserve preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, will shed clues on the inflation battle unfolding in the world largest economy. The PCE Price Index is preferred to the Consumer Price Index (CPI) since it is updated more often to account for changing consumer preferences, therefore providing a more accurate gauge on spending.

According to preliminary projections, the PCE Price Index likely rose 0.2% last month, whereas in April the rate was 0.4%. On an annual basis, that rate is tipped to come in at 4.1%, which is down from the 4.4% recorded a month prior. In terms of core prices, which exclude volatile energy and food costs, the reading likely grew at a rate of 4.5% year-over-year, down from 4.7% in April.

Another prominent data-point over the coming days will be the latest data on US home prices.Keeping a global focus and the European Central Bank (ECB) forum will also be a talking point as European, US, UK, and Japanese central bank officials convene. Monetary policy is sure to be part of the narrative, especially as countries throughout Europe continue to hike rates.The week rounds out with preliminary Eurozone inflation data, as well as the release of June purchasing manager indexes (PMI) in China.

Stocks on watch

Following events in Russia over the weekend, investors may be keeping a watchful eye over the energy and gold markets.

With Russia being a major energy supplier, the price of oil could come into focus as observers take into account any potential supply risks that just a few days ago would have been overlooked. Crude oil prices were trading only slightly above prices last seen at the end of November 2022, with concerns about the global economic outlook taking their toll. 

In the event of any ructions in the energy market, stocks to watch include Woodside Energy (ASX: WDS), Santos (ASX: STO), Beach Energy (ASX: BPT), Karoon Energy (ASX: KAR), Exxon Mobil (NYSE: XOM), Chevron NYSE: CVX), BP (NYSE: BP), Whitehaven Coal (ASX: WHC), New Hope (ASX: NHC), and Yancoal (ASX: YAL).

Meanwhile, despite a sudden de-escalation in what was looming as a challenge on Russia leadership, it remains to be seen whether any residual uncertainty drives action across the gold market. The price of the precious metal was sitting near a three-and-a-half month low at the end of last week, but gold is typically seen as a safe haven' asset when geopolitical conflict arises. 

Some of the most popular gold names include Newcrest Mining (ASX: NCM), Northern Star Resources (ASX: NST), Evolution Mining (ASX: EVN), and Barrick Gold (NYSE: GOLD), to name a few.After releasing its full-year results for FY23 this morning, Metcash (ASX: MTS) has declared a fully-franked dividend of 22.5 cents per share, up nearly 5% versus the prior corresponding period. The wholesale distributor reported record results, including a 4.6% increase in underlying profit after tax to $307.5 million. At the same time, revenue climbed more than 6% to $15.8 billion, with sales growth continuing into the early stages of FY24 thus far.Construction contractor Lendlease (ASX: LLC) is in the news as the company reportedly sells future tranches of cash flow at its One Sydney Harbour' project. The deal involves the forward sale of apartment pre-sale contracts, with two separate tranches set to exceed more than $600 million. At the same time, the company is said to be looking at three processes across its communities and retirement projects in order to free capital for investment in higher-margin projects.

Auction clearance rates touched a three-week high over the weekend as momentum continues to lift the property market in an upwards direction. While it was the eighth consecutive week where the national preliminary auction rate cleared 70%, national volumes were down 8% year-over-year. 

The contrasting data could be something that investors in the likes of REA Group (ASX: REA) and Domain Holdings (ASX: DHG) pay attention to, with some of the buying activity attributed to buyers trying to avoid stamp duty on NSW property purchases before the end of the financial year.Elsewhere, childcare business G8 Education (ASX: GEM) is among the first of what is expected to be a number of businesses looking to pass on higher costs associated with the government-backed decision to raise award wages by 5.75%. 

Following a 6% increase at the start of the year, it is the second occasion that G8 has increased its prices in the space of six months. It comes at a time where the RBA has vocally spelled out concerns about services inflation and the risk of wages running above-trend without any improvements in workforce productivity.

On the earnings front, Nike (NYSE: NKE) is the main name to deliver results this week. The global athletic apparel name has faced inventory concerns, with the company gross margin growth a potential focal point as excess inventory levels weigh on the business. With consumer demand understood to be potentially slowing in the face of tightening consumer spending, the athletic apparel industry is pushing promotions to clear inventory, albeit potentially at the expense of revenue and margins.