On the opening day of the week the market is in indubitable good mood. Practically no reaction on China bad news confirms that statement. Chinese CPI was 5.1 percent high and PPI equaled 6.1 percent. Both mentioned figures were largely above previous and expected values. Puny market reaction on such a concernful information might be accounted for by virtually no reaction of Bank of China, reaction that is usually expected in case of such releases. Instead of boosting interest rates, which was forecast by market, Chinese authorities decided to increase bank reserve rate to the highest ever 18.5 percent. Taken actions seem to be too indecisive and may not successfully slacken Chinese economy, causing harmful hangover in the near future.
Rather slow beginning of the week is likely to take place today. As solely one significant data release is coming from market today, we advice to bias your trading attitude even more towards technical analysis. British Producer Price Index will be released at 9:30. Forecast value 0.7 percent and previous one 2.1 percent.
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