China has stepped into deflation territory: China’s consumer price index fell 0.3% y-o-y in July, while year-to-date inflation is at 0.5% — far below the government’s annual inflation target of 3%. The country’s deflationary trend, which comes as many other countries grapple with persistently sticky inflation, was attributed to weaker local consumer demand after lifting covid-19 restrictions.

“The Chinese economy is now at serious risk of sliding into a deflationary episode that could spark a self-reinforcing downward spiral in growth and private sector confidence,” China finance expert at Cornell University Eswar Prasad told the Financial Times. The Wall Street Journal and Reuters also had coverage.

WeWork in the danger zone: The coworking spaces provider once privately valued at USD 47 bn saw its market cap plummet to just USD 260 mn on Wednesday, Reuters reports. Shares dropped nearly 40% to close at USD 0.12 after the SoftBank-backed company warned that it could be facing bankruptcy.

EGX30

17,764

+0.1% (YTD: +21.7%)

USD (CBE)

Buy 30.83

Sell 30.96

USD at CIB

Buy 30.85

Sell 30.95

Interest rates CBE

19.25% deposit

20.25% lending

Tadawul

11,286

+0.4% (YTD: +7.7%)

ADX

9,953

-0.4% (YTD: -2.5%)

DFM

4,071

-0.2% (YTD: +22.0%)

S&P 500

4,468

-0.7% (YTD: +16.4%)

FTSE 100

7,587

+0.8% (YTD: +1.8%)

Euro Stoxx 50

4,317

+0.7% (YTD: +13.8%)

Brent crude

USD 87.40

+1.4%

Natural gas (Nymex)

USD 2.96

+6.6%

Gold

USD 1,950.60

-0.5%

BTC

USD 29,498

-1.2% (YTD: +78.5%)

THE CLOSING BELL-

The EGX30 was unchanged at Wednesday’s close on turnover of EGP 2.37 bn (21.6% above the 90-day average). Foreign investors were net sellers. The index is up 21.7% YTD.

In the green: Ezz Steel (+4.4%), Heliopolis Housing (+4.0%) and Eastern Company (+2.3%).

In the red: Beltone Financial Holding (-4.7%), Sidepc (-2.1%) and Qalaa Holdings (-1.3%).

Asian markets are down across the board in early trading this morning . The picture is the opposite to our west, where futures suggest that both European and US benchmarks will open in the green later on today.

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