Economic Signals That Could Shape China’s Stimulus Decision


Inflation Data, Market Mood, and China’s Property Sector Woes

Amidst a crucial week for Asian markets, attention is on key economic indicators impacting monetary policy in major economies. Retail sales, industrial production, and house (Property) prices in China, along with Japan’s GDP and inflation, are in focus.

Interest rate decisions from New Zealand and the Philippines, Indian inflation figures. And significant corporate earnings from Chinese giants like Tencent and JD.com are eagerly anticipated.

In India, a surge in annual consumer price inflation to 6.40% from 4.8%. And a decline in wholesale price deflation to -2.4% from -4.1% could influence market sentiment.

China’s property concerns weigh heavily as the largest private developer, Country Garden, suspends onshore bond trading. Investors speculate on how long Beijing can withstand pressure to stimulate an economy officially in deflation.

Bank of Japan and investor attention turn to Japanese inflation data, predicting core CPI inflation to slow to 3.1% in July. As the yen faces scrutiny, its recent decline against the euro and dollar sparks interest.

Market performances reflect concerns over China’s growth struggles, deflation, and capital outflows. Amidst this backdrop, Asian markets have faced challenges, with Chinese blue-chip stocks stagnating and Hong Kong’s Hang Seng index down by 4%.

Key developments for Monday encompass India’s consumer and wholesale inflation figures, along with Germany’s wholesale inflation for July.