One of the world’s most bearish analysts, Société Générale’s Albert Edwards, is gloomier than ever. His latest note warns that markets entranced by the US Federal Reserve’s “dovish tone’ have missed the big picture: the latest data from China “significantly increases” the odds of the global economy slipping into a deflationary slump.
China is “sliding inexorably” into deflation, says Edwards. Producer prices have now dropped for 25 months in a row. True, consumer prices (CPI) are still rising by around 2% a year. But the GDP deflator – a wider gauge of inflation than CPI as it includes investment goods [...]
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