After the markets went gangbusters last Thursday and Friday they all took a collective breather today. The markets got off to a rough start on Sunday and all signs started pointing to a down day for equities, commodities, and higher-risk currencies like the euro, pound sterling, and Aussie dollar. What was the first sign? China... The latest inflation data out of China was not pretty and came as an unexpected surprise to market participants. Don't forget, China has been hailed as the next Messiah who will save the global economic markets and that means more participants are watching and scrutinizing China's economic fundamentals much more so than in the past, including yours truly. I would almost never pay attention to China but now that the markets are putting their hope and faith in China to help revive the markets, I think it's important to watch some of their key data.As you know I'm all about inflation data right now because inflation is one of the only true catalysts that will drive these markets higher. Any signs of disinflation, especially in China, will not make the markets happy. Chinese CPI printed down 1.5% month-over-month while PPI print down a scary 6.6% month-over-month. Chinese CPI has dropped for three straight months while PPI was the worst print in the last 10-years of record keeping for this data out of China. The response from this data was felt across the board last night as the Shanghai Composite closed down 1.8% and the S&P 500 futures, Dow futures, and crude sold-off all through the Asian trading session while the JPY gained some ground back. And there's plenty more inflation data for the markets to play with the rest of this week
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