American CPI to set the tone

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news American inflation is in the spotlight this week and will set the tone for markets worldwide.</p><p>But first up in China, we got an indication of just how serious Beijing is to restart their economy after the pandemic. China's banks extended <a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4790629/index.html" target="_blank"><strong>+¥4.9 tln in new yuan loans in January</strong></a>, well above market expectations of +¥4.0 tln and the largest amount of new loans ever. It is a monumental amount of new lending for just one month, +NZ$1.15 tln and for perspective for all of 2022, the approved a record +¥21.3 tln. In just January 2023 alone it raised that by almost a quarter! They aren't doing things by halves here and won't die wondering.</p><p>China also reported <a href="http://www.stats.gov.cn/tjsj/zxfb/202302/t20230210_1902645.html" target="_blank"><strong>January inflation</strong></a> at a +2.1% rate although the rise from December was at an annualised rate exceeding +9%. Still, this was very much as markets expected. The <a href="http://www.stats.gov.cn/tjsj/zxfb/202302/t20230210_1902644.html" target="_blank"><strong>producer price deflation</strong></a> however seems to be staying minor.</p><p>That is not the case in Japan where January <a href="https://www.boj.or.jp/statistics/pi/cgpi_release/cgpi2301.pdf" target="_blank"><strong>producer prices</strong></a> came in +9.5% higher than a year ago (as expected), although in the December to January period they vanished.</p><p>And staying in Japan, they are about to get a new, and somewhat unexpected Governor of their central bank. He is said to be "Japan's Ben Bernanke". The government's preferred candidate declined the promotion and <a href="https://www.japantimes.co.jp/news/2023/02/10/business/kazuo-u