Container Ships : China to USA

‼️ The ships just keep coming ‼️

China Inflation Rate

China's consumer prices dropped by 0.1% year-on-year in April 2025, maintaining the same pace for the second month and matching market expectations. 

It marked the third consecutive month of consumer deflation, weighed by the combined effects of ongoing trade tensions with the US, weak domestic demand, and persistent employment uncertainty. 

Non-food prices were flat after the prior 0.2% rise, as increases in housing (0.1% vs 0.1% in March), healthcare (0.2% vs 0.1%), and education (0.7% vs 0.8%) were offset by a sharper drop in transport cost (-3.9% vs -2.6%). 

On the food side, prices saw their smallest fall in three months, amid a sharp rebound in fresh food costs in the face of extreme weather, supply chain disruptions, and the impact of trade barriers.

Core inflation, which excludes volatile food and fuel prices, rose 0.5%, holding steady for the second month. 

On a monthly basis, the CPI edged up 0.1%, reversing a 0.4% drop in March and recording the first increase in three months. 

source: National Bureau of Statistics of China

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UPDATE: US Dollar

The US dollar index climbed toward 101 on Friday, poised for its third consecutive weekly gain as improving global trade sentiment and fading expectations of imminent rate cuts supported the greenback. 

The rally was fueled in part by President Donald Trump's announcement of a preliminary trade deal with the UK, the first since the US imposed sweeping tariffs last month. 

Trump also suggested that additional agreements could follow and hinted at a potential easing of tariffs on China, depending on the outcome of upcoming trade talks in Switzerland. 

On the monetary policy front, Federal Reserve Chair Jerome Powell dismissed the idea of a preemptive rate cut in response to potential economic fallout from tariffs. 

Powell also warned of elevated risks to both inflation and unemployment, signaling caution before adjusting policy further. 

The US Dollar posted its strongest gains this week against the Euro, New Zealand Dollar, and Australian Dollar.

US Consumer Inflation Expectations

US consumer inflation expectations for the year ahead were unchanged at 3.6% in April 2025, the same as in March, holding at 2023-highs. 

Year-ahead commodity price expectations increased for gas (+0.3 percentage point to 3.5%), medical care (+0.8 percentage point to 8.7%), college (+2.4 percentage points to 9.1%), rent (+1.8 percentage points to 9%) and home prices (0.3 percentage point to 3.3%). 

In contrast, year-ahead expected price of food decreased by 0.1 percentage point to 5.1%. Meanwhile, inflation expectations for the three-year horizon rose to 3.2%, the highest reading since July 2022 while inflation expectations for the five-year ahead horizon decreased by 0.2 percentage point to 2.7%. 

source: Federal Reserve Bank of New York

FOMC Rate Change Probability

The treasuries market is pricing in a 96.8% chance of no interest rate change by the FOMC this week, Wed May 7.

US Existing Home Sales

Existing home sales are scraping at multi-decade lows, and have shown no meaningful signs of recovery.

The only other time in recent history when homebuyer demand was this low was the 2007-2012 housing crash.

That downturn produced a 25% decline in home prices. In contrast, this downturn has yet to see national prices drop.