Who would have thought that an interest rate hike in New Zealand would spark a sell-off in global markets?! Inflation is the buzzword around the world this week.
And over in Asia, an inflation check in 36 cities across China shows a substantial surge in food prices. May statistics from the Ministry of Commerce show the price of wholesale pork climbed 43% from a year earlier; add to that, a 31% increase in egg prices, a 40% hike in cooking oil and don’t forget rice … up 6%. And rice makes up a hefty portion of the Chinese diet. Mix it all in a bowl and you will have a rather costly serving of inflation stew.
Economic Data This Week
Food accounts for a third of the Chinese consumer price inflation basket due out on Tuesday. More importantly, analysts are calling it the single most vital piece of data, pivotal to whether or not the Peoples Bank of China will raise rates at their next meeting.