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(H2) Eyeing $90.00


TurkGBs on Track for 100+ bp Weekly Gain Pre-CBRT


E-MINI S&P (H2): Bearish Risk Still Present

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  • China inflation will come out overnight (1.30 London time), with PPI inflation expected to decelerate to 12.1% YoY in November after reaching a 26-year high of 13.5% in October.
  • China ‘liquidity’ (TSF 12M sum) suggests that the inflation peak is near and that we should enter into a ‘disinflationary’ period in the next 6 to 12 months.
  • The chart below shows that China liquidity has strongly led PPI inflation by 9 months in the past 15 years.
  • A higher-than-expected PPI print limits the room for policy easing in the medium term.
  • We saw that China cut its RRR by 50bps this week to stimulate both the economic activity and asset prices (i.e. equities) and sell-side firms have been pricing in further cuts coming ahead.

Source: Bloomberg/MNI