Danske Research previews the US May CPI report on Wednesday.

"We forecast tomorrow’s May CPI at 4.3% y/y (Apr. 3.8%) in headline terms and 2.9% y/y (Apr. 2.8%) in core terms, slightly above consensus. The headline figure is still primarily lifted by higher gasoline prices. In monthly terms, core inflation will likely slow down (+0.3% m/m SA, Apr. +0.4% m/m SA) after the one-off technical distortion that boosted housing inflation in April," Danske notes.

"In case the CPI surprises on the top side, we would not be surprised to see markets temporarily pricing in even more hikes than we ultimately expect to materialise. Our trade recommendations for going long USD FX vis-à-vis SEK and NOK have performed well over the past week, and we continue to like both cases," Dasnke adds.