The US CPI report isn’t the only big one this week.
China also releases its inflation data on January 11 and it will highlight the room the PBOC has to cut rates. The November CPI reading was -0.5% y/y and December is likely to be even lower as energy costs pass through.
That highlights just how much room that China has to lower rates. The PBOC meets on its benchmark loan prime rate on Monday Jan 21 and Nomura is out with a note saying a rate cut is ‘quite likely’.
That will be welcome news for Chinese stocks, which have struggled badly this year after a poor year in 2023.
Shanghai Comp daily