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Asian markets in suspense over China consumer prices, Japan trade data
Lately, China`s Consumer Price Index (CPI) – a main gauge of inflation – gained helpedby resuscitated exports, industrial output and the recovery in the manufacturing sectoraccording to the PMI gauge.
World`s second-largest economy trade balance –expected to be released soon – willundoubtedly reveal the extent of recovery and its impact on inflation rates China.
Trade surplus, on the backdrop of an effectively-growing economy, is forecasted to widenand exports to flourish. This will reflect on consumer spending, prices of which may rise evenmore, especially if global demand on Chinese products picks up over the period ahead.
In Japan however, the trade balance for December is not as welcomed; surrounded by pallid,lackluster world economy, trade surplus is expected to come in faint when compared withthe Japanese government`s momentous efforts and stimulatory measures found to "waterthe economy."
Market analyses indicate that the recent drop in the yen could tighten the strap aroundthe trade deficit. Although the yen’s depreciation helped local exporters and traders boosttheir businesses, the case is not fit to last, it most certainly is not sufficient to solve Japan`seconomic malaise.
In the midst of these market variables and anticipated data, ECB and BoE decisions oninterest rates are key catalysts steering events in the Asian market this week. Whereas theUnited States Federal Reserve stretched assets-purchasing program "manifested" – mindyou the use of the word – some sort of optimism over the outlook for global economy,especially following similar promising reports from the country and Germany as well.
Nonetheless, the debt ceiling dilemma brewing in the world`s leading economy is a ratherconcerning matter; results of this financial conundrum are so far off and "unknown." Whenthe puzzle and questions looming around the debt ceiling issue start to unfold and come atmedia hand, a heightened sense of hesitation and reluctance will definitely surface in themarket.
Like its predecessor – the Fiscal Cliff – did when it came to be a celebrity in the internationaleconomic street, the debt ceiling will have a definite impact on world`s economies. Althoughit may not come to pass, its severity will reflect on trades and market around the world.