The China Consumer Price Index for December rose by 0.8% compared to last year, which is slightly below the expected 0.9%. This shows that inflation is growing at a slower pace than anticipated. In the commodities market, global oil prices are falling due to fears of oversupply as inventories increase. Gold prices have also dropped, likely because the US Dollar has strengthened to a nearly one-month high.

Cryptocurrency Market Trends

The cryptocurrency market appears stable, with Bitcoin, Ethereum, and Ripple staying above critical support levels. These digital currencies could continue to gain strength if they maintain these support zones. In forex trading, GBP/JPY rose close to 211.30 because the yen is performing poorly. Meanwhile, the Australian dollar fell as the US dollar strengthened, and USD/INR increased as traders look forward to US economic data releases. Pepe is experiencing selling pressure, with its value dropping after a recent significant rise. On-chain data indicates decreased network activity, suggesting possible shifts in market interest. Market analysts expect a stable economic outlook for 2026. Although last year had uncertainties that are still unresolved, they are not expected to return at the same level.

China Economic Outlook

China’s consumer price index came out at 0.8%, below expectations for the third consecutive month. This indicates a slowdown in domestic demand, similar to the deflation we saw after 2009. It raises the likelihood of a monetary stimulus from the People’s Bank of China before the end of the quarter. We are seeing the effects of economic weakness in China reflected in commodities prices, with WTI crude oil nearing $58 a barrel. The latest data from the Energy Information Administration revealed an unexpected inventory increase of 4.2 million barrels, bringing U.S. stockpiles to a six-month high. This supports the oversupply narrative and leads us to suggest considering put options on major oil ETFs. The US dollar continues to perform well ahead of the crucial Non-Farm Payrolls report expected later today. We are observing the EUR/USD fading near 1.1650, and the Australian Dollar losing ground, which confirms the dollar’s strength. Economists predict a gain of 185,000 jobs, and a number at or above this point would likely boost the dollar further. Given this situation, we should prepare for continued momentum in the dollar, but also protect ourselves against potential volatility around the NFP release. Placing a straddle on the USD/JPY pair could be a smart move, allowing profit from a significant shift in either direction. This is especially relevant as the Japanese yen consistently underperforms. The yen’s poor performance is a long-term trend that intensified after last year’s policy decisions made in 2025. With the Bank of Japan confirming its ultra-loose policy, the difference with other central banks is quite clear. There are ongoing opportunities to short the yen against currencies that have a more hawkish policy outlook, like the British pound. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now