With oil prices down $7.5% today and natural gas down 30% from the highs, there is a growing list of reasons to believe that US inflation has peaked.

On Wednesday, we will get the June CPI report and it's forecast to show year-over-year prices up 8.8% from 8.6% previously. The monthly rise of 1.1% will also be a slightly higher pace than 1.0% previously.

Since June though, US gasoline prices have fallen sharply. That will put major downward pressure on July inflation and, as it stands now, it's almost certain to be a negative m/m reading.

I suspect the market will be paying close attention to goods prices. Consumer spending has shifted to services (travel) and buying in goods has slowed dramatically, leaving retailers with too much inventory. They have begun to discount it and that should start to come though in apparel, electronics and household supplies. More will be coming in the months ahead.

The services side is a tougher read. Airfares have probably peaked but there are tailwinds for rent and owners' equivalent rent; though some suggest that's moderating.

It's increasingly easy to see how prices will moderate in H2, particularly if energy cooperates.

That hasn't gone unnoticed by the bond market with 5-year 5-year forward breakeven rates back on the Fed's target.