Stocks Slip on Chinese Inflation Data

The absence of Chinese inflation and an annualized PPI running at -5.4% send deflationary fears through the market, leading to a stock market selloff during today’s Asian session.

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  1. Equity markets are lower on flat Chinese inflation data and a rapidly falling PPI which is showing an annualized rate of -5.4%, leading to fears of deflationary pressure. Most global stock markets are trading lower, especially in Asia, where the Hang Seng Index and the Nikkei 225 Index are both down from their respective daily opens.
  2. Bitcoin again closed Friday below what seems to be a very pivotal round number at $31k, with the price action now looking more uncertain, suggesting that a bullish breakout may not be happening.
  3. The Japanese Yen remains the weakest major currency over the long term and over today’s Asian session. Some days ago the USD/JPY currency pair made a new 7-month high above ¥145, but it is now trading well below that level. Trend traders will remain interested in being short of the Japanese Yen, while the US Dollar has been the strongest major currency so far today. The Australian Dollar is also weak today following the impact of the poorer than expected Chinese economic data.
  4. Governor Bailey of the Bank of England has rejected calls to raise the inflation target above 2%, despite the UK’s relatively high and persistent rate of inflation.
  5. Markets are expecting a 25bps rate hike from the Bank of Canada later this week.


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