Chinese stocks may have taken a nosedive following the latest monthly wholesale inflation figures that were the highest in a decade at 10% (9.1% was the forecast), but investors should have been paying greater attention to the trade numbers. Both exports and imports in July beat forecasts, regardless of a slowing global economy and anaemic growth in China’s key export market, the U.S.
The inflation figures were spiked by high energy and commodity prices. Energy prices, at least, have eased since July, so the downward trend in consumer price inflation that we’ve seen since February’s peak of 8.7% shouLd be interrupted only temporarily if at all. Consumer price numbers are due on Tuesday.