11:44 AM · 9 April 2021

Will US inflation follow China footsteps🔝❓

EUR/USD
Forex
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The inflation reading in China was very surprising. PPI producer inflation increased by 4.4% YoY against the expectation of 3.5% YoY. In the previous month, the reading was 1.7% y / y.Meanwhile , CPI inflation increased to 0.4% YoY against the expectation of 0.3% YoY and at the previous level of -0.2% YoY. The scale of the increase or surprise is considerable, but it is worth remembering that the pandemic in China in March last year was at its peak, which means that the base effect was considerable in this case. The same may be true for inflation in Western countries, although the greatest effect is likely to be seen in April or May.

Today analysts’ expects that PPI reading will rise to 3.8% YoY against the previous reading of 2.8% YoY, and dynamics of 0.5% MoM is to be continued. Looking at the performance of bond yields in the US, it can be seen that the market may have started to watch out for inflation signals again, which in turn causes the strengthening of the dollar. Data will be released at 1:30 PM BST.

EURUSD bounced off the upper limit of the overbalance structure and is approaching the key support around 1.1850. Source: xStation5

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