Key inflation data looms with rate cuts in focus

China’s confidence problem
China’s biggest problem is a “lack of confidence,” Standard Chartered CEO Bill Winters told CNBC. China’s stock market and deflation issues, coupled with its property troubles are posing a challenge for its growth prospects. “External investors lack confidence in China and domestic savers lack confidence,” Winters noted.

China, Russia threat
A new study showed China and Russia are seen as less of a threat to Western populations now than a year ago. This is mainly because public concern has shifted to non-traditional risks such as mass migration due to war or climate change and radical Islam.

Bitcoin surges
Bitcoin extended its gains, breaking through the $50,000 level on Monday. This is a major milestone since the “launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a selloff and some deep soul searching about these new bitcoin products,” said Antoni Trenchev, co-founder of crypto services firm Nexo.

[PRO] China’s still in play
Despite the problems plaguing China’s economy, there are several sectors and stocks that offer good investment opportunities said Redmond Wong, market strategist at investment firm Saxo. “I’m still positive and optimistic on China right now,” he noted.

Wall Street gets its first look at U.S. inflation on Tuesday when the consumer-price index for January is published.

This is a much-anticipated report that once again draws attention to what the Fed might do on interest rates.

A lower-than-expected CPI reading will boost investor hopes that rate cuts may happen sooner rather than later.

Federal Reserve Governor Adriana Kugler last week highlighted that there are signs that inflation is easy, but said she wants to see more evidence of it.   

“I am pleased by the progress on inflation, and optimistic it will continue, but I will be watching the economic data closely to verify the continuation of this progress,” Kugler said.

Minneapolis Fed President Neel Kashkari also expressed caution on cutting rates too quickly and said he only expects two or three reductions this year.

More key economic data is also expected this week, including January’s reading on retail sales, production and the producer price index. These should give investors fresh hints on the Fed’s path for rate cuts amid the uncertainty.  

— CNBC’s Jeff Cox contributed to this report