Xi Jinping
The Federal Reserve is entering a blackout period even after the FOMC decision, and the US economic calendar is light today, with only wholesale inventories and employment trends.
This will give the market a chance to catch its breath after a hectic week at the start of the month. It is also a chance to look outside and digest the difficulties in China. Iron ore prices today hit their lowest levels since 2022 in a strong sign of Chinese demand.
We also got China’s CPI and PPI both below expectations at +0.6% YoY and -1.8% YoY respectively. These raw numbers tell you all you need to know about the ammunition the PBOC has at its disposal but is reluctant to use due to currency concerns. The good news is that the currency has held up so they have some room to ease.
Will they take it?
On Friday, we get industrial production and retail sales data from China. Another round of bad numbers could add to the pressure.