The move had little broader impact on markets in the run-up to tonight’s U.S. CPI release and this week’s major central bank decisions. It did spur a rally in China’s benchmark 10-year government bonds, though, and sent the beleaguered yuan to six-and-a-half-month lows – without doing much to boost local stocks, in a worrying reflection of what’s increasingly being dubbed a loss of confidence in Chinese growth prospects.
Elsewhere in Asia, stocks tracked Wall Street’s higher close and the U.S. dollar was on the back foot on expectations of a pause in the U.S. Federal Reserve’s interest rate hike cycle on Wednesday.
In corporate news, Intel is in talks with SoftBank Group’s Arm to be an anchor investor in the chip designer’s initial public offering, a person familiar with the matter told Reuters on Monday.
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Europe’s calendar highlights include UK employment data, Germany’s ZEW survey for June and final May inflation data, and Bank of (BoE) Governor Andrew Bailey’s parliamentary testimony.
BoE policymaker Catherine Mann struck a typically hawkish note in comments on Monday, and Bailey is likely to face challenging questions on persistently sticky inflation as the market continues to price around 100 bps of rate hikes to 5.50%, including a 25 bps move next week.
In the U.S., CPI data is likely to dominate market interest and factor into the Federal Open Market Committee’s (FOMC) deliberations as it begins a two-day meeting.
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/cloudfront-us-east-2.images.arcpublishing.com/reuters/2DJH3O3EPROJHPEYG4PQZYBJK4.jpg "China steals the show before US inflation 32")
