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China, US Inflation and Reopening Impact

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Inflation figures for the two largest economies worldwide are expected to be released later in this week. However, the US figure will be the most important.

The PBOC has set a limit on the yuan’s trading, which limits its potential impact. The wider implication of China’s prices and causes can have global consequences.

Over the weekend, China officially lifted all restrictions on covid. This initially supported risk-on sentiments in the markets. Later in the day, however, Fed officials made a complete turnaround. It’s just an example of where the balance of influence is, when it comes to the key data coming up this week.

China inflation is far more important than it seems

Effectively, China is the world’s manufacturing center. China’s manufacturing centers will be able to push the supply chain out of China if their production costs rise. The last few months have seen China subject to restrictions, which has impacted productivity. The government has spent money to support the economy. China is in the same situation as other countries that are experiencing high inflation.

China’s lifting of restrictions, on the…



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