US inflation stubborn, equities revalue lower

<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 all eyes this week will be on how equity markets react to stubborn US inflation and the expected Fed resolve.</p><p>But first, in China they are about to <a href="https://www.chinabankingnews.com/2023/02/24/beijing-expected-to-shake-up-chinas-financial-regulatory-system-with-appointment-of-new-central-bank-governor/" target="_blank"><strong>dump the respected technocrat boss</strong></a> of their central bank with new political appointments and giving Beijing even closer control over monetary policy. It is a shift that raises the risks of unexpected consequences in policy changes. It is also very noticeable how little economic data is being published by China these days. It was already quite light for a major power, but the flow is drying up even more. Their push to deny international news organisations visas has tightened the flow inexorably. China is more opaque than ever.</p><p>Separately, the central bank released a standard quarterly "<a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4804390/index.html" target="_blank"><strong>implementation report</strong></a>" on Friday, saying it wants to avoid "flood irrigation" of new debt to support their recovering economy. But they also noted the external environment remains "severe and complex", adding that the basics of domestic economic recovery are "not solid". The report also said the property sector requires time to transition while the pressure of balancing local government fiscal revenue and expenditure persists.</p><p>This report is probably the final from the current bank leadership. You have to hope the new appointments retain a sense of realism to avoid boom settings that will just make the resulting bust arrive faster.</p><p>Japan <a href="https://www.stat.go.jp/data/cpi/sokuhou/tsuki/pdf/zenkoku.pd