Global inflation trends we’re tracking this week:

China Producer Price Index

The week kicked off with new price data out of China, where the National Bureau of Statistics reported a 9% year-on-year increase in producer prices, slightly higher than the consensus estimate of 8.8%. Upward price pressure persists despite efforts by the authorities to deflate a rallying commodity prices by releasing supply from strategic reserves. Producers are set to face more challenges going forward due to China’s ongoing Delta outbreak, which is locking down factory workers and clogging up domestic transportation networks; case-in-point is the recent shutdown of a terminal at the Ningbo-Zhoushan port, which is the world’s third-busiest by container traffic.

EU Inflation Data

Germany and Italy released final inflation numbers for July earlier in the week, with Spain and France expected to follow suit before the weekend. Italy’s 1.9% reading for July came in slightly higher than the 1.8% consensus estimate, and though the annualized increase may seem tame vis-à-vis inflation in other major European economies of late, the 0.5% month-on-month increase suggests strong momentum going forward (the consensus MoM estimate was 0.3%). The preliminary estimate of 3.8% annualized inflation for Germany in July has now been finalized by the Federal Statistical Office. It is a significant jump from the 2.3% recorded in July. Moreover, it’s the first time that a monthly reading has broken through the 3% mark since the 2008 Financial Crisis.