Equity futures are set for a weaker open, yields are higher, and exchange rates are milling about in a confused manner as liquidity ebbs ahead of tomorrow’s consumer price data. The dollar continues to unwind Friday’s gains.

Oil prices are ratcheting higher after a report said Ukraine’s Ukrtransnafta last week halted flows across the Druzhba 1 pipeline that delivers Russian crude to Europe. A Bloomberg article quoted a Transneft spokesperson who said sanctions were preventing the payment of a transit fee to the pipeline’s operator. The West Texas Intermediate and Brent benchmarks are up roughly 1 percent each, but the euro thus far seems unaffected – perhaps implying that traders expect the issue to be resolved in short order.

Optimism among US small businesses seemed to improve slightly last month. A survey published by the National Federation of Independent Business climbed off June’s nine-year low, but the index tends to tell us more about how Republicans feel about the current political climate than about underlying economic conditions.

This morning’s data is unlikely to move markets. US non-farm labour productivity is expected to fall at a 5 percent annualized pace in the second quarter, with unit labour costs rising 9.5 percent. Productivity rates are some of the most important numbers in the economy, but traders work on goldfish-like timelines, and tend to ignore developments that take longer to impact outcomes.

Tomorrow’s consumer price index remains the week’s riskiest print. Economists think annual inflation fell to 8.7 percent in July from 9.1 percent in June, but some nowcasting models are pointing higher. Odds on a 75 basis-point move at the Federal Reserve’s September meeting are holding near the 70 percent mark, and could rise further if the headline number beats forecasts.

But inflation expectations are coming down. July data released by the Federal Reserve Bank of New York yesterday showed the median consumer thought prices would rise 6.2 percent in the next year, down from the 6.8 percent recorded in June. Over a five year horizon, inflation was seen running at 2.3 percent, down from the 2.8 percent previously estimated. This shift suggests that it is gasoline prices, not interest rates or other more nuanced economic variables, that are influencing consumer price perceptions. Prices at the pump have fallen for eight straight weeks and are nearing pre-war levels as the summer driving season draws to an end.