Support
Asian markets open mixed
China's trade surplus shrank more than expected in July due to EU tariffs on electric vehicles and declining copper and oil imports.
Wells Fargo forecasts a 0.2% rise in July's headline CPI, maintaining the year-over-year rate at 3%.
Japanese stocks rebounded over 10%, recovering from losses, despite mixed signals from BoJ policymakers on rate hikes.
Weak consumer demand pressures discretionary item prices, pushing inflation back to pre-pandemic levels.
China trade data
Trade data revealed a bleak economic outlook, with China's trade surplus contracting significantly more than anticipated in July. Exports unexpectedly declined following the European Union's imposition of steep tariffs on Chinese electric vehicles.
Additionally, China's imports of copper and oil saw a decrease, suggesting lower domestic demand for these resources, indicating slowdown in China's industrial activity, construction, manufacturing, and energy consumption.
July CPI
Wells Fargo anticipates inflation to slowdown in July, while core prices could see a minimal uptick. The bank forecasts a 0.2% increase in the headline CPI for July, keeping the year-over-year rate at a three-year low of 3%.
The core CPI is also projected to rise by 0.2% in July, driven by a rebound in some of the more volatile 'super core' components," the analysts noted.
Additionally, weakening consumer demand is exerting downward pressure on prices, especially for discretionary items, pushing inflation back to pre-pandemic levels.
Asia
Japanese stocks rebounded by more than 10% recovering Monday losses, over mixed opinions by the BoJ policymakers indicating mixed opinion when it comes to additional interest rate hikes.
Asian stocks were capped by a drop in underwhelming earnings from chip conductors as Super Micro disappoints while TSMC falls 2%.
