Rising Inflation the Latest Headache For Central Banks

Global central banks have spent trillions of dollars and the years since the financial crisis battling to ward off deflation and with mounting signs that their efforts are now paying off, inflation numbers are a key market focus Tuesday.

Despite the strengthening trend in data seen in recent months, rhetoric from central banking chiefs continues to be tilted away from pursuing swift actions to address rising prices and instead directed towards prioritizing other economic imperatives. Meantime longer-term bond yields in key global markets have been on a mostly steady march higher since last summer.

Inflation data out of China on Tuesday surprised to the upside with spikes in energy costs leading the way, helped by food and tourism. Yet the People’s Bank of China looks set to maintain its focus on containing leverage and preventing bubbles over targeting inflation – and according to some economists, is right to do so for now.

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.