February 13, Thursday

High-level Voices:
• The U.S. January non-seasonally adjusted CP| rose by 3% year-over-year, expected to rise by 2.9%, previous value rose by 2.9%; after seasonal adjustment, CP| rose by 0.5% month-over-month, expected to rise by 0.3%, previous value rose by 0.4%.

Overall Sentiment:
• The U.S. January CP| was higher than market expectations, further dampening hopes for a U.S. rate cut. Traders have shifted their bets from a September rate cut to a December one, meaning if inflation data continues to exceed expectations, there might not be a rate cut in 2025.
• Maintaining high interest rates in the
U.S. impacts the exchange rates of other currencies against the dollar. Here, we actually hope more than the U.S. that they cut rates; a persistent high interest rate differential will continue to pressure the RMB exchange rate.