Chinese Business

European stock markets and the dollar fell Wednesday ahead of a crucial US inflation report that could help set the the pace of future interest rate hikes by the US Federal Reserve. 

Analysts warn that if the reading exceeds forecasts, it could increase the possibility of further monetary policy tightening by the Fed, reinforcing expectations for a possible recession. 

The US central bank has said its decision on the timing and magnitude of the rate hikes will depend on data, as it attempts to tread a fine line between bringing down inflation from four-decade highs and not choking off recovery. 

Recent indicators showing a slowdown in activity had fuelled hopes that the Fed would be less hawkish. 

But a bigger-than-predicted jump in US jobs last month revived talk of a third straight three-quarter-point hike in September.

The Fed “will need to make sure inflation moves back towards target sustainably before contemplating pausing its tightening cycle”, said Carol Kong at Commonwealth Bank of Australia.

“A strong inflation outcome today will likely reinforce the (Fed) is still some way away from that point yet, and see markets re-adjust higher their expectations for US interest rates.”

The data on Wednesday come at a sensitive time for world markets, which have been buffetted by the war in Ukraine, supply chain snarls and rising China-US tensions over Taiwan.

While the latest earnings season has been less painful than feared, there are increasing signs that the economic slowdown is beginning to impact companies, with some major firms — including Apple and Amazon — providing downbeat outlooks.

Chip-maker Micron became the latest, saying revenue would likely come in at the low end of its forecasts in the fourth quarter owing to weak demand.

A day before, rival Nvidia unveiled disappointing results.

Elsewhere, oil prices remain stuck around six-month lows, even after news that supplies from Russia to three European countries through Ukraine had been halted as sanctions prohibited the processing of the transit payment.

Crude oil prices have essentially wiped out all the gains seen since Russia’s invasion of its neighbour in February as expectations of a recession hit demand forecasts.

But Edward Moya, analyst at Oanda trading group, said the market would not likely weaken further.

“Whatever crude demand destruction that occurs from a weakening global economy won’t be able to drag down oil prices much lower given how low the supply outlook remains,” he said. 

– Key figures at around 1100 GMT –

London – FTSE 100: UP 0.1 percent at 7,491.60 points

Frankfurt – DAX: UP 0.1 percent at 13,553.42

Paris – CAC 40: DOWN 0.1 percent at 6,484.03

EURO STOXX 50: DOWN 0.1 percent at 3,712.82

Tokyo – Nikkei 225: DOWN 0.7 percent at 27,819.33 (close)

Hong Kong – Hang Seng Index: DOWN 2.0 percent at 19,610.84 (close)

Shanghai – Composite: DOWN 0.5 percent at 3,230.02 (close)

New York – Dow: DOWN 0.2 percent at 32,774.41 (close)

Euro/dollar: UP at $1.0237 from $1.0213 Tuesday

Pound/dollar: UP at $1.2091 from $1.2071

Euro/pound: UP at 84.66 pence from 84.57 pence

Dollar/yen: DOWN at 134.97 yen from 135.12 yen

West Texas Intermediate: DOWN 1.3 percent at $89.35 per barrel

Brent North Sea crude: DOWN 1.2 percent at $95.12 per barrel

Equities fell Wednesday, tracking a drop on Wall Street ahead of a crucial US inflation report later in the day, which could have a huge bearing on the Federal Reserve’s plans for raising interest rates.

Investors are preparing for the consumer price figures with a sense of dread as analysts warn a forecast-beating reading would ramp up bets on another big Federal Reserve hike and reinforce recession expectations.

The US central bank has said its decision on when and by how much to tighten monetary policy will be driven by data as it struggles to walk a fine line between bringing inflation down from four-decade highs and trying not to damage the economy.

There had been hope that recent indicators showing activity slowing would give the Fed room to be less hawkish. But a bigger-than-predicted jump in jobs last month revived talk of a third straight three-quarter-point hike in September.

“The (Fed policy board) will need to make sure inflation moves back towards target sustainably before contemplating pausing its tightening cycle,” Carol Kong, of Commonwealth Bank of Australia, said.

“A strong inflation outcome today will likely reinforce the (board) is still some way away from that point yet, and see markets readjust higher their expectations for US interest rates.”

Wednesday’s figures come at a sensitive time for world markets, which have been buffeted by a range of other issues including the war in Ukraine, supply chain snarls and rising China-US tensions over Taiwan.

While the latest earning season has been less painful than feared, there are increasing signs that the economic slowdown is beginning to impact companies, with some major firms — including Apple and Amazon — providing downbeat outlooks.

Chip-maker Micron became the latest, saying revenue would likely come in at the low end of its forecasts in the fourth quarter owing to weak demand. That came a day after rival Nvidia unveiled disappointing results.

Tech firms led losses in New York, with the Nasdaq off more than one percent, and they did so in early Asian trade.

Hong Kong led losses, shedding two percent, while Shanghai, Tokyo, Sydney, Seoul, Mumbai, Wellington, Taipei, Bangkok and Jakarta also dropped.

Traders were unmoved by the news that China’s consumer price index rose last month to a two-year high but came in below expectations.

London, Paris and Frankfurt were also down in the morning.

Oil prices sank and remain stuck around six-month lows, even after news that supplies from Russia to three European countries through Ukraine had been halted as sanctions prohibited the processing of the transit payment.

The cost of the commodity has essentially wiped out all the gains seen since Russia’s invasion of its neighbour in February as expectations of a recession hit demand forecasts, while consumers are put off buying petrol owing to rising prices.

But OANDA’s Edward Moya said the market would not likely weaken further.

“Whatever crude demand destruction that occurs from a weakening global economy won’t be able to drag down oil prices much lower given how low the supply outlook remains,” he said in a note. 

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: DOWN 0.7 percent at 27,819.33 (close)

Hong Kong – Hang Seng Index: DOWN 2.0 percent at 19,610.84 (close)

Shanghai – Composite: DOWN 0.5 percent at 3,230.02 (close)

London – FTSE 100: DOWN 0.1 percent at 7,4478.76

Euro/dollar: DOWN at $1.0203 from $1.0213 Tuesday

Pound/dollar: UP at $1.2083 from $1.2071

Euro/pound: DOWN at 84.44 pence from 84.57 pence

Dollar/yen: DOWN at 135.00 yen from 135.12 yen

West Texas Intermediate: DOWN 0.8 percent at $89.79 per barrel

Brent North Sea crude: DOWN 0.6 percent at $95.69 per barrel

New York – Dow: DOWN 0.2 percent at 32,774.41 (close)

Hong Kong carrier Cathay Pacific on Wednesday reported losses had narrowed in the first half after an “extremely difficult start” to the year, but said its capacity will improve in coming months as travel sentiment improves.

The US$637 million loss in January-June was narrower than the US$968 million deficit suffered in the same period last year, as the airline benefited from strong cargo demand and cost-cutting measures.

Chairman Patrick Healey said in a statement that the first few months were “particularly unfavourable” as pandemic-related travel restrictions severely constrained Cathay’s flight operations and greatly affected demand for travel.

But he added that the airline was gearing up for borders reopening and expected a stronger second-half.

Cathay aims to boost passenger flight capacity to a quarter of pre-pandemic levels by the end of 2022, while it is looking to lift cargo capacity to 65 percent, Healey said.

The airline carried 335,000 passengers in the first half of the year, more than double that of the same period in 2021, bringing in US$263 million in revenue. Income from the cargo unit jumped 9.3 percent to US$1.5 billion.

Total revenue was up 17 percent on-year at US$2.4 billion.

Hong Kong has taken tentative steps toward reopening its borders after being internationally isolated for two and a half years owing to strict Covid rules for travellers.

On Monday authorities said visitors would now have to spend just three days in hotel quarantine, down from seven and much lower than the three weeks earlier in the year.

Cathay praised the adjustments as “positive steps” but pressed the government to “urgently provide a clear roadmap” to remove all pandemic-related restrictions on passengers and aircrew.

The firm’s ability to operate more flights “continues to be severely constrained by a bottleneck on crewing resources under the existing quarantine requirements”, Healey said on Wednesday.

Last month, Hong Kong also suspended a circuit-breaker mechanism that penalised airlines for bringing in coronavirus cases — which had affected numerous Cathay routes, including for key markets such as the United States and Britain.

The airline operated just 29 destinations in January, compared with more than 100 before the pandemic.

Hong Kong authorities are hinting at a potential international reopening in November, timed to coincide with the high-profile Rugby Sevens tournament and a banking summit.

Cathay is bringing aircraft parked overseas back to Hong Kong and is aiming to hire more than 4,000 front-line employees over the next 18 to 24 months, Healey said.

In June, Hong Kong also extended the drawdown period of a US$1 billion bridge loan to Cathay — the second time in two years — as part of a US$5 billion government bailout to help the airline weather the pandemic.

Hong Kong’s home carrier suffered a reputational blow earlier this year when a coronavirus outbreak was traced to two of its flight attendants who breached their quarantine rules. They were fired and later prosecuted.

One of India’s biggest stars is banking on a remake of Hollywood feelgood hit “Forrest Gump” to revive the fortunes of Hindi-language Bollywood, after a string of weak box-office showings.

Aamir Khan’s “Laal Singh Chaddha”, an adaptation of the 1994 US classic starring Tom Hanks, hits cinemas on Thursday ahead of India’s 75th independence celebrations.

Disappointing takings for other Bollywood A-listers have cast a pall over an industry still recovering from Covid-19 lockdown losses when many in movie-mad India turned to streaming giants like Netflix and Disney+ Hotstar.

The adaptation keeps several iconic scenes from the original — which netted six Oscars, including for Best Picture — such as a floating white feather, ping-pong playing and lots of running.

– Box of golgappas –

But there are several changes, with Gump’s “box of chocolates” line becoming “Life is just like a golgappa. Your tummy might feel full, but your heart always craves more.”

Golgappa is a popular Indian snack, while the second half of the saying — “you never know what you’re gonna get” in the original —  draws from a common Hindi phrase.

The film promises to take people through India’s history in the same way Gump stumbled through and influenced major US events like the Vietnam War.

This could irk Indian right-wing critics who have already called for a boycott of the film because of comments made by Khan in 2015 that were deemed to be unpatriotic.

Khan, the star of megahit “Dangal” (2016), and screenwriter Atul Kulkarni were coy in sharing what Indian historical settings would be featured.

Kulkarni would only say that his script was a “beautiful story about a beautiful country called India through a beautiful person called Laal Singh”.

– Remaking a ‘classic’ –

Khan, 57, admitted that he initially put off reading Kulkarni’s script, uncertain it would be possible to adapt such a “cult classic”.

“It’s like saying we are remaking ‘Mughal-e-Azam’ and ‘Mother India’. It’s not a wise thing to do,” he said, referring to two Indian classics.

“But when I heard the script, I understood he’s done it. It was a moving experience for me. I really loved it. The moment I heard it I wanted to do this.”

Bollywood star Kareena Kapoor, 41, who plays Singh’s lifelong friend Rupa, based on Robin Wright’s Jenny Curran, said the plot was “timeless” with a love story at its core.

“I wondered how they would play around with such an iconic film,” added Naga Chaitanya, a Telugu-language star from the southern film industry “Tollywood” who plays Bala, an adaptation of Gump’s shrimp-fishing Vietnam comrade Bubba.

“But the way they have conceived the film for Indian cinema is unique.”

– Competition –

Recent silver-screen hits have not come from Hindi-language Bollywood but are in other Indian languages, such as action flicks “Pushpa”, “KGF: Chapter 2” and “RRR”.

“RRR”, released in March, raked in $87 million domestically, while “KGF: Chapter 2”, which debuted a few weeks later, took in $106 million, media analyst Karan Taurani of Mumbai-based Elara Capital told AFP.

Action film “Shamshera”, released on July 22 and starring Bollywood actor Ranbir Kapoor, has so far only made $5.6 million, dashing hopes it would lure audiences back to Hindi cinema.

A rare Bollywood hit this year has been comedy horror “Bhool Bhulaiyaa 2” released on May 20 and featuring rising star Kartik Aryan, which has brought in $24 million so far.

Now, all eyes are on “Laal Singh Chaddha” and family dramedy “Raksha Bandhan” with Bollywood megastar Akshay Kumar — which also releases on Thursday.

Taurani estimates that “Laal Singh Chaddha” will make $19 million, falling short of Khan’s per-film average of $35 million.

Khan, who co-produced “Laal Singh Chaddha”, believes Bollywood hasn’t lost its mojo, blaming the early release of movies on streaming services for lower box-office takings.

“I feel that perhaps we — I’m including myself in this — as Hindi filmmakers, need to… also pick topics which are relevant to a larger audience, as opposed to picking topics which are relevant to a smaller audience,” he said.

When video game designer Mark Venturelli was asked to speak at Brazil’s biggest gaming festival, he submitted a generic-sounding title for his presentation — “The Future of Game Design” — but that was not the talk he gave.

Instead, he launched into a 30-minute diatribe against the blockchain technology that underpins cryptocurrencies and the games it has spawned, mostly very basic smartphone apps that lure players with the promise of earning money.

“Everything that is done in this space right now is just bad — actually it’s terrible,” he told AFP.

He is genuinely worried for the industry he loves, particularly because big gaming studios are also sniffing around the technology.

To crypto enthusiasts, blockchain will allow players to grab back some of the money they spend on games and make for higher-stakes enjoyment.

Critics say the opposite is true — game makers will capture more profits while sidestepping laws on gambling and trading, and the profit motive will kill all enjoyment.

The battle lines are drawn for what could be a long confrontation over an industry worth some $300 billion a year, according to Accenture.

– ‘Ecologically mortifying’ –

Gamers like Venturelli might feel that they have triumphed in the early sorties.

Cryptocurrencies have crashed recently and dragged down the in-game tokens that had initially attracted players.

“Nobody is playing blockchain games right now,” Mihai Vicol of Newzoo told AFP, saying between 90 and 95 percent of games had been affected by the crash. 

Ubisoft, one of the world’s biggest gaming firms, last year tried to introduce a marketplace to one of its hit games for trading NFTs, the digital tokens that act as receipts for anything from art to video game avatars. 

But gamers’ forums, many already scattered with anti-crypto sentiment, lit up in opposition.

Even French trade union IT Solidarity got involved, labelling blockchain “useless, costly, ecologically mortifying tech” — a reference to the long-held criticism that blockchain networks are hugely power hungry.

Ubisoft quickly ditched the NFT marketplace in Tom Clancy Ghost Recon Breakpoint.

Last month, Minecraft, a world-building game hugely popular with children and teenagers, announced it would not allow blockchain technology. 

The firm criticised the “speculative pricing and investment mentality” around NFTs and said introducing them would be “inconsistent with the long-term joy and success of our players”.

The wider sector also has a serious image problem after a spectacular theft earlier this year of almost $600 million from Axie Infinity, a blockchain game popular in the Philippines. 

Analyst firm NonFungible last week revealed that the NFT gaming sector crashed in the second quarter of this year with the number of sales plunging 22 percent.

All of this points to a bleak time for crypto enthusiasts, but blockchain entrepreneurs are not giving up. 

– ‘Revolutionise’ gaming –

Sekip Can Gokalp, whose firms Infinite Arcade and Coda help developers introduce blockchain to their games, argues it is still “very early days”.

He told AFP some of the attention-grabbing play-to-earn games had been “misguided” and he was convinced the technology still had the potential to “revolutionise” gaming.

Reports of a culture clash between gamers and crypto fans, he said, were overplayed and his research suggested there was substantial overlap between the two communities.

Gokalp can take heart from recent announcements by gaming giants such as Sega and Roblox, a popular platform mostly used by children, indicating they are still exploring blockchain. 

And Ubisoft, despite abandoning its most high-profile blockchain effort, still has several crypto-related projects on the go. 

Among the many benefits trumpeted by crypto enthusiasts are that the blockchain allows players to take items from one game to another, gives them ownership of those items and stores their progress across platforms. 

Vicol, though, reckons blockchain gaming needs to find other selling points to succeed.

“It could be the future,” he said, “but it’s going to be different to how people envisage it today”. 

Brazilian Venturelli, whose games include the award-winning Relic Hunters, used his talk at the BIG Festival in Sao Paulo to dismiss all the benefits trumpeted by crypto fans as either unworkable, undesirable or already available. 

And he told AFP that play-to-earn games risked real-world damage in Latin America — a particular target for the industry — by enticing young people away from occupations that bring benefits to society.

He said many people he knows, including venture capitalists and the heads of billion-dollar corporations, shared his point of view.

“They came to congratulate me on my talk,” he said. 

But with new blockchain games emerging every day, he accepts that the battle is far from over.

One of India’s biggest stars is banking on a remake of Hollywood feelgood hit “Forrest Gump” to revive the fortunes of Hindi-language Bollywood, after a string of weak box-office showings.

Aamir Khan’s “Laal Singh Chaddha”, an adaptation of the 1994 US classic starring Tom Hanks, hits cinemas on Thursday ahead of India’s 75th independence celebrations.

Disappointing takings for other Bollywood A-listers have cast a pall over an industry still recovering from Covid-19 lockdown losses when many in movie-mad India turned to streaming giants like Netflix and Disney+ Hotstar.

The adaptation keeps several iconic scenes from the original — which netted six Oscars, including for Best Picture — such as a floating white feather, ping-pong playing and lots of running.

– Box of golgappas –

But there are several changes, with Gump’s “box of chocolates” line becoming “Life is just like a golgappa. Your tummy might feel full, but your heart always craves more.”

Golgappa is a popular Indian snack, while the second half of the saying — “you never know what you’re gonna get” in the original —  draws from a common Hindi phrase.

The film promises to take people through India’s history in the same way Gump stumbled through and influenced major US events like the Vietnam War.

This could irk Indian right-wing critics who have already called for a boycott of the film because of comments made by Khan in 2015 that were deemed to be unpatriotic.

Khan, the star of megahit “Dangal” (2016), and screenwriter Atul Kulkarni were coy in sharing what Indian historical settings would be featured.

Kulkarni would only say that his script was a “beautiful story about a beautiful country called India through a beautiful person called Laal Singh”.

– Remaking a ‘classic’ –

Khan, 57, admitted that he initially put off reading Kulkarni’s script, uncertain it would be possible to adapt such a “cult classic”.

“It’s like saying we are remaking ‘Mughal-e-Azam’ and ‘Mother India’. It’s not a wise thing to do,” he said, referring to two Indian classics.

“But when I heard the script, I understood he’s done it. It was a moving experience for me. I really loved it. The moment I heard it I wanted to do this.”

Bollywood star Kareena Kapoor, 41, who plays Singh’s lifelong friend Rupa, based on Robin Wright’s Jenny Curran, said the plot was “timeless” with a love story at its core.

“I wondered how they would play around with such an iconic film,” added Naga Chaitanya, a Telugu-language star from the southern film industry “Tollywood” who plays Bala, an adaptation of Gump’s shrimp-fishing Vietnam comrade Bubba.

“But the way they have conceived the film for Indian cinema is unique.”

– Competition –

Recent silver-screen hits have not come from Hindi-language Bollywood but are in other Indian languages, such as action flicks “Pushpa”, “KGF: Chapter 2” and “RRR”.

“RRR”, released in March, raked in $87 million domestically, while “KGF: Chapter 2”, which debuted a few weeks later, took in $106 million, media analyst Karan Taurani of Mumbai-based Elara Capital told AFP.

Action film “Shamshera”, released on July 22 and starring Bollywood actor Ranbir Kapoor, has so far only made $5.6 million, dashing hopes it would lure audiences back to Hindi cinema.

A rare Bollywood hit this year has been comedy horror “Bhool Bhulaiyaa 2” released on May 20 and featuring rising star Kartik Aryan, which has brought in $24 million so far.

Now, all eyes are on “Laal Singh Chaddha” and family dramedy “Raksha Bandhan” with Bollywood megastar Akshay Kumar — which also releases on Thursday.

Taurani estimates that “Laal Singh Chaddha” will make $19 million, falling short of Khan’s per-film average of $35 million.

Khan, who co-produced “Laal Singh Chaddha”, believes Bollywood hasn’t lost its mojo, blaming the early release of movies on streaming services for lower box-office takings.

“I feel that perhaps we — I’m including myself in this — as Hindi filmmakers, need to… also pick topics which are relevant to a larger audience, as opposed to picking topics which are relevant to a smaller audience,” he said.

Asian equities fell Wednesday, tracking a drop on Wall Street ahead of a crucial US inflation report later in the day, which could have a huge bearing on the Federal Reserve’s plans for raising interest rates.

Investors are preparing for the consumer price figures with a sense of dread as analysts warn a forecast-beating reading would ramp up bets on another big Federal Reserve hike and reinforce recession expectations.

The US central bank has said its decision on when and by how much to tighten monetary policy will be driven by data as it struggles to walk a fine line between bringing inflation down from four-decade highs and trying not to damage the economy.

There had been hope that recent indicators showing activity slowing would give the Fed room to be less hawkish. But a bigger-than-predicted jump in jobs last month revived talk of a third straight three-quarter-point hike in September.

“The (Fed policy board) will need to make sure inflation moves back towards target sustainably before contemplating pausing its tightening cycle,” Carol Kong, of Commonwealth Bank of Australia, said.

“A strong inflation outcome today will likely reinforce the (board) is still some way away from that point yet, and see markets readjust higher their expectations for US interest rates.”

Wednesday’s figures come at a sensitive time for world markets, which have been buffeted by a range of other issues including the war in Ukraine, supply chain snarls and rising China-US tensions over Taiwan.

While the latest earning season has been less painful than feared, there are increasing signs that the economic slowdown is beginning to impact companies, with some major firms — including Apple and Amazon — providing downbeat outlooks.

Chip-maker Micron became the latest, saying revenue would likely come in at the low end of its forecasts in the fourth quarter owing to weak demand. That came a day after rival Nvidia unveiled disappointing results.

Tech firms led losses in New York, with the Nasdaq off more than one percent, and they did so in early Asian trade.

Hong Kong, Shanghai, Tokyo, Sydney, Seoul, Wellington, Taipei, Manila and Jakarta were all well down.

There was little initial  reaction to news that China’s consumer price index rose last month to a two-year high but came in below expectations.

Oil prices were flat but remained around six-month lows, even after news that supplies from Russia to three European countries through Ukraine had been halted as sanctions prohibited the processing of the transit payment.

The cost of the commodity has essentially wiped out all the gains seen since Russia’s invasion of its neighbour in February as expectations of a recession hit demand forecasts, while consumers are put off buying petrol owing to rising prices.

But OANDA’s Edward Moya said the market would not likely weaken further.

“Whatever crude demand destruction that occurs from a weakening global economy won’t be able to drag down oil prices much lower given how low the supply outlook remains,” he said in a note. 

– Key figures at around 0230 GMT –

Tokyo – Nikkei 225: DOWN 0.8 percent at 27,767.07 (break)

Hong Kong – Hang Seng Index: DOWN 1.6 percent at 19,687.72

Shanghai – Composite: DOWN 0.4 percent at 3,233.24

Euro/dollar: UP at $1.0215 from $1.0213 Tuesday

Pound/dollar: UP at $1.2081 from $1.2071

Euro/pound: DOWN at 84.55 pence from 84.57 pence

Dollar/yen: DOWN at 135.06 yen from 135.12 yen

West Texas Intermediate: DOWN 0.1 percent at $90.45 per barrel

Brent North Sea crude: UP 0.1 percent at $96.39 per barrel

New York – Dow: DOWN 0.2 percent at 32,774.41 (close)

London – FTSE 100: UP 0.1 percent at 7,488.15 (close)

China’s consumer inflation rose in July to a two-year high, official data showed Wednesday, with a surge in pork prices pushing up the cost of food.

Compared with other countries, consumer costs in the world’s second-biggest economy have not skyrocketed, largely spared the impact of a global surge in food prices after the Russian invasion of Ukraine.

China’s consumer price index (CPI), a key gauge of retail inflation, grew less than expected at 2.7 percent from a year ago in July, National Bureau of Statistics (NBS) data showed.

CPI rose slightly on-year “due to an increase in prices of pork, fresh vegetables and other food, as well as seasonal factors”, NBS senior statistician Dong Lijuan said in a statement.

Food prices were up 6.3 percent on-year, with pork spiking 20.2 percent in July, she added.

Prices of the staple meat rose in part because of the reluctance of some farmers to sell — ostensibly to maximize profits — and a pick-up in consumer demand, according to the NBS.

While fuel prices were also higher than the same period last year, their growth rates have declined, Dong said.

“The headline rate has been lifted by fuel inflation and, more recently, a rebound in food inflation,” said Julian Evans-Pritchard, senior China economist at Capital Economics in a recent report.

He added that a weak labour market “may further sap price pressures”, and that he expects inflation to fall later this year.

The producer price index (PPI) — measuring the cost of goods at the factory gate — rose 4.2 percent in July, down from 6.1 percent in June, official data showed Wednesday.

This was lower than the expectation in a Bloomberg poll of analysts.

The NBS said this was influenced by a drop in international commodity prices such as crude oil and non-ferrous metals.

“The priority given to keeping factories open while restricting many consumer activities has meant that, domestically, lockdowns have been disinflationary,” Evans-Pritchard added in his earlier report.

“Unlike elsewhere, stimulus has targeted investment rather than household spending.”

Stock markets were mostly lower and the dollar fell on Tuesday as investors nervously await the release of key US inflation data later this week.

If the official consumer price data Wednesday come in above analysts’ forecasts, the markets could see a sharp sell-off, analysts warned.

With inflation already at the highest level in 40 years, concern is growing that further interest rate increases by the world’s major central banks could go too far and tip the global economy into recession.

Federal Reserve officials in recent days have stressed that more hikes are coming to tame soaring inflation, with a third straight three-quarter point increase on the table next month.

The inflation data “could effectively set the mood for the rest of the summer,” said OANDA analyst, Craig Erlam.

“That seems quite dramatic, but if we fail to see a drop in the headline rate… it could really take the wind out of the sails of stock markets as it would be very difficult for the (Fed) to then hike by anything less than 75 basis points in September,” the expert said.

While US gasoline prices have been coming down, which takes some of the pressure off American families, the overall rate remains high.

Swissquote Bank analyst Ipek Ozkardeskaya said the recent drop in energy and commodity prices “should have a cooling effect… but higher labour costs could keep inflation sticky at undesirably high levels.”

Oil prices reversed some of the prior day’s gains and remain around six-month lows as recession fears mount and investors fret over the impact on demand. 

The markets are also keeping an eye on Iran nuclear talks after the European Union submitted a “final text” at negotiations to salvage a 2015 deal.

An agreement could open the way for Tehran to resume sales of crude on international markets, partly filling the gap left by the ban on Russian exports following the invasion of Ukraine. 

US tech shares tumbled after a second major chip maker issued an earnings warning.

“It seems that the technology sector along with the rest of the economy is slowing,” said Tom Cahill of Ventura Wealth Management.

– Key figures at around 2045 GMT –

New York – Dow: DOWN 0.2 percent at 32,774.41 (close)

New York – S&P 500: DOWN 0.4 percent at 4,122.47 (close)

New York – Nasdaq: DOWN 1.2 percent at 12,493.93 (close)

London – FTSE 100: UP 0.1 percent at 7,488.15 (close)

Frankfurt – DAX: DOWN 1.1 percent at 13,534.97 (close)

Paris – CAC 40: DOWN 0.5 percent at 6,490.00 (close)

EURO STOXX 50: DOWN 1.1 percent at 3,715.37

Tokyo – Nikkei 225: DOWN 0.9 percent at 27,999.96 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 20,003.44 (close)

Shanghai – Composite: UP 0.3 percent at 3,247.43 (close)

Euro/dollar: UP at $1.0213 from $1.0194 Monday

Pound/dollar: UP at $1.2071 from $1.2079

Euro/pound: UP at 84.57 pence from 84.35 pence

Dollar/yen: UP at 135.12 yen from 134.98 yen

Brent North Sea crude: DOWN 0.1 percent at $96.57 per barrel

West Texas Intermediate: DOWN 0.1 percent at $90.70 per barrel

Stock markets were mostly lower and the dollar fell on Tuesday as investors nervously await the release of key US inflation data later this week, traders said.

If the data, scheduled for publication on Wednesday, come in above analysts’ forecasts, the markets could see a sharp sell-off, analysts warned.

With inflation already at the highest level in 40 years, concern is growing that further monetary tightening by the world’s major central banks could go too far and tip the global economy into recession.

The inflation data “could effectively set the mood for the rest of the summer,” said OANDA analyst, Craig Erlam.

“That seems quite dramatic, but if we fail to see a drop in the headline rate… it could really take the wind out of the sails of stock markets as it would be very difficult for the (US Federal Reserve) to then hike by anything less than 75 basis points in September,” the expert said.

The US central bank has already raised borrowing costs by three-quarters of a percentage point twice in recent months in a bid to tame runaway prices.

Swissquote Bank analyst Ipek Ozkardeskaya said the recent drop in energy and commodity prices “should have a cooling effect… but higher labour costs could keep inflation sticky at undesirably high levels”.

Oil prices rose, but remain around six-month lows as recession fears mount and investors fret over the impact on demand. 

The markets are also keeping an eye on Iran nuclear talks after the European Union submitted a “final text” at negotiations to salvage a 2015 deal.

An agreement could open the way for Tehran to resume sales of crude on international markets, partly filling the gap left by the ban on Russian exports following the invasion of Ukraine. 

Edward Moya, analyst at OANDA trading group, said “it seems unlikely a breakthrough will happen anytime soon. 

“Tehran seems like they are willing to negotiate, but an imminent decision to agree to the EU’s proposal seems unlikely,” he said. 

– Key figures at around 1545 GMT –

New York – Dow: FLAT at 32,822.27 points

London – FTSE 100: UP 0.1 percent at 7,488.15 (close)

Frankfurt – DAX: DOWN 1.1 percent at 13,534.97 (close)

Paris – CAC 40: DOWN 0.5 percent at 6,490.00 (close)

EURO STOXX 50: DOWN 1.1 percent at 3,715.37

Tokyo – Nikkei 225: DOWN 0.9 percent at 27,999.96 (close)

Hong Kong – Hang Seng Index: DOWN 0.2 percent at 20,003.44 (close)

Shanghai – Composite: UP 0.3 percent at 3,247.43 (close)

Euro/dollar: UP at $1.0227 from $1.0194 Monday

Pound/dollar: UP at $1.2091 from $1.2079

Euro/pound: UP at 84.60 pence from 84.35 pence

Dollar/yen: UP at 135.00 yen from 134.98 yen

Brent North Sea crude: UP 0.2 percent at $96.81 per barrel

West Texas Intermediate: DOWN 0.1 percent at $90.66 per barrel