Weekly

China announced yesterday the Industrial Producer Index (PPI) and the Consumer Price Index (CPI) for May. The ex-factory price of domestic industrial producers (PPI) fell 3.7% year on year last month.

The largest decline since March 2016 also exceeded market expectations.  However, CPI rose 2.4% year on year and 3.3% in April.  PPI deflation intensified and CPI inflation slowed down, reflecting the slow recovery of China's economy.

Inflation pressure cannot be generated. If this trend continues, CPI will go into deflation, which is not conducive to the development of the country.  The United States also released the core consumer price index (CPI) for May last night.

The data is as good as the market expected -0.1%, better than April -0.4%, which proves that the US economy has signs of improvement.  Comparing the two countries with CPI, China's growth is slowing down while that of the United States is improving but still negative.

If these two sets of data are used to analyze the degree of economic recovery, it is really difficult to separate yuan from yuan.  Oil prices have changed from falling to rising. According to data from the US Energy Information Agency, US crude oil stocks unexpectedly increased by 5.7 million barrels last week, reaching a record high.

Gasoline stocks increased 866,000 barrels, significantly exceeding expectations.  New york oil fell more than 2% before closing up 1.7% and finally closed at 39.6 U.S. dollars a barrel, up 66 cents.

Early this morning, the U.S. Federal Reserve announced the results of the interest rate discussion and decided to maintain the target range of the federal funds interest rate at 0-0.25%, which is in line with market expectations.  The Federal Reserve also said it would keep interest rates at current levels.

Until the economy has passed the test of recent events and is on track to achieve employment and inflation targets.  It is expected that the interest rate will remain at the current level until the end of 2022.

The Federal Reserve has suspended the publication of economic and interest rate forecasts since March this year and resumed this morning. The economy is expected to contract by 6.5% this year, much less than the 2% growth forecast in December last year, and will grow by 5% next year.

In addition to sharply lowering the GDP growth rate, the unemployment rate was also raised to 9.3% from the 3.5% expected in December.  Inflation has been adjusted from 1.9% to 0.8%.

After the announcement of the interest rate discussion results, the US dollar index fell further to 96.2. Gold prices also continued to rise as the US dollar weakened, closing at a peak of US$ 1740 an ounce at US$ 1737.

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