The Fed is in the blackout period until after the FOMC decision and the US economic calendar is light today, featuring only wholesale inventories and employment trends.
That will give the market a chance to catch its breath after a hectic week to start the month. It's also a chance to look abroad and digest the woes in China. Iron ore prices hit the lowest since 2022 today in a solid proxy for Chinese demand.
We also got Chinese CPI and PPI and both were below expectations at +0.6% y/y and -1.8% y/y, respectively. Those raw numbers tell you all you need to know about the ammunition that the PBOC has but is reluctant to use because of currency worries. The good news is that the currency has firmed so they have some room to ease.
Will they take it?
On Friday we get Chinese industrial production and retail sales data. Another round of bad numbers should ramp up the pressure.
