Chinese CPI grew at the fastest pace since September 2020
On Tuesday, the report showed that US PPI rose 0.6% month over month, in line with estimates. From a year ago, wholesale prices rose 8.6%, their highest annual pace in records going back nearly 11 years. Against this backdrop, investors switched into a profit-taking mode ahead of key inflation data, thus pushing the leading Wall Street indexes off record highs seen at the beginning of the week. As such, the S&P 500 slid 0.4%, the Dow Jones shed 0.3%, and the tech-heavy Nasdaq lost 0.6%.
Following suit, Asian stocks were broadly lower on Wednesday, with China-related concerns adding to a more downbeat sentiment among regional investors. According to fresh data, factory gate prices in China rallied 13.5% year-on-year in October, while Factory gate prices in China have soared 13.5% year-on-year to October, while the CPI rose by 1.5% (the fastest pace since September 2020), up from 0.7% in September.
In Europe, however, the sentiment has improved somehow, with major indexes holding onto modest gains in early trading while US stock index futures managed to erase early losses. In individual stocks, Marks & Spencer shares rallied nearly 15% after the retailer posted strong third-quarter earnings. On the data front, Germany’s October final CPI came in at +4.5%m in line with the preliminary estimate.
In currencies, the dollar is mostly higher so far on the day as some demand has reemerged in anticipation of US inflation data due later today. The CPI is expected to show a 0.6% rise month-on-month, to 6% on a yearly basis, which would be the most in thirty years. Strong figures could push the greenback rallying across the market amid more aggressive expectations surrounding rate hikes by the Federal Reserve.