European stock futures dips on lower China Inflation data. Data made public earlier on Monday indicated a drop in China’s consumer prices.
European share markets on Monday saw a decline in as dismal Chinese inflation statistics sparked worries over the condition of the second-biggest economy in the world.
At 03:30 ET (07:30 GMT), the CAC 40 slid 0.4 percent, the DAX index traded 0.4% down. And the FTSE 100 in the traded 0.1% weaker/
European stocks are heavily impacted by China slow down
Chinese pricing data raises fears about deflation, according to data provided earlier on Monday.
China consumer prices idecreased by 0.2% on a monthly basis in June. Leaving the entire year entirely flat and growing at the smallest pace since 2021. Based on statistics issued earlier Monday.
Furthermore, producer prices decreased 5.4 percent year over year in June. Which was the highest rate of decline in 7.6 years.
CHINA INFLATION INDICATORS
| Indicator | Data | Period |
|---|---|---|
| Consumer Price Index (CPI) | 103 index points | May/23 |
| Food Inflation | 1 % | May/23 |
| Inflation Rate YoY | 0.2 % | May/23 |
| Inflation Rate Mom | -0.2 % | May/23 |
| Core Consumer Prices | 101 Index Points | May/23 |
| Core Inflation Rate | 0.6 % | May/23 |
These figures imply that the Chinese government will want to relax its fiscal and monetary policies even more. Yet additionally indicate that China confronts a significant problem in preventing a full-fledged deflationary loop.
Considering the value of the Chinese market for European suppliers, this might have a significant effect on business.
The week’s important announcement is U.S. inflation.
Inflation statistics for June are going to be released in Europe during the week. Likewise, the attention will be focused more on the USA. The report on Wed is anticipated to indicate that the index of consumer prices increased at a yearly pace of 3.1 percent in June. Which represents the weakest rise until March 2021.
The data was released following Friday’s June employment report (NFP). Having nearly ensured that the Fed will start raising rates again in the coming weeks.
Crude Oil declines due to worries about Chinese demand
The Chinese inflationary report raised fears that the economic recovery of the second-biggest economy in the world—and its largest consumer of crude—was stalling, which led to a decline in the price of oil on Monday.
As of 03:30 ET, the price of U.S. crude futures was down 0.9 percent at $73.20 per barrel. Whereas the price of the Brent contract was down 0.9 percent at $77.78.
The globe’s two largest oil suppliers, Saudi Arabia and Russia, announced intentions to intensify production curbs in August. Helping both benchmarks increase by over four percent this past week to reach their highest point since May.
The price of gold futures also decreased by 0.1 percent to $1,929.95/oz, and the EURUSD exchange rate dipped by 0.1 percent to 1.0955.
