- Following some disappointment at a Politburo meeting and worse-than-expected inflation numbers over the weekend, Chinese stocks fell, pulling down Asian shares.
- China's mainland stocks tumbled about 1%, causing a two-session decline in a regional gauge following data released on Saturday that revealed consumer prices plummeted at the fastest rate in three years. The removal of the word "forceful" from China's authorities' description of monetary policy for 2024 may surprise some market participants. Compared to most of its major counterparts, the dollar increased.
- The rest of the region saw mixed moves as traders anticipated a busy week filled with events, including US inflation data on Tuesday, a Federal Reserve policy decision on Wednesday, and retail sales data on Thursday.
- In a letter to clients, Citi analysts led by Xinyu Ji stated, "China's deflation situation is deepening with the triple whammy from domestic food prices, international oil price corrections, and weak domestic demand." There is growing danger of an impending reserve-requirement ratio and/or rate reduction, they stated, and "there is no time for policy hesitation to prevent a vicious loop between deflation, confidence, and activities."
