Rising Inflation the Latest Headache For Central Banks

February 14, 2017 Share Print 0

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

Senior Market Analyst, UK & EMEA at OANDA

Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.