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chinese March Inflation

Usually, CPI data from China primarily affects CNH, since it mostly has implications on PBOC policy.

But we aren’t in a “usual” situation. Just like many are looking at China for clues as to how the coronavirus outbreak will progress, many are also tracking the Asian Giant’s economic recovery.

Inflation is one of the many factors to consider in the aftermath of the outbreak as the world economy gets back to producing. The massive stimulus going around is going to take a toll on world currencies.

Depending on how central banks “sterilize” their asset purchases, we could see a major problem with inflation. That, at least, is according to traditional economic models.

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