China: PPI deflation eases further – Standard Chartered

💡 DMK Insight

China’s easing PPI deflation is a signal for traders to watch commodity prices closely. As the PPI shows signs of stabilizing, particularly with increases in metal and energy prices, this could indicate a rebound in industrial demand. Traders should keep an eye on how this impacts related assets like copper and crude oil, which often react to shifts in Chinese economic data. If PPI continues to trend upwards, it might lead to increased inflation expectations globally, affecting forex pairs sensitive to commodity prices, especially AUD/USD and CAD/USD. However, there’s a flip side: if this uptick is short-lived and doesn’t translate into sustained demand, we could see a reversal, leading to volatility in commodity markets. Watch for key levels in metal prices; a break above recent highs could signal further bullish momentum. In the coming weeks, monitor the global economic indicators that could either support or undermine this trend.