China reported that March CPI rose 5.4% y/o/y, above expectations of 5.2% and the most since July ’08. The immediate stock market response was lower but the Shanghai index ended up closing slightly higher on the day. The Indian Sensex though fell 1.6% after wholesale prices rose 8.98% y/o/y, above forecasts of 8.36%. Also in China, PPI, IP, and Retail Sales all gained more than estimated. Today’s WSJ highlights the convoluted process that China goes through in dealing with and adjusting monetary policy. Euro Zone CPI in March was revised up to a 2.7% gain y/o/y vs the initial report a few weeks ago of 2.6% and is up from 2.4% in Feb. Moody’s downgraded Ireland’s credit rating by 2 notches to Baa3 and is now 2 notches below both S&P and Fitch. While signs still point to the sovereign debt issue in Europe being contained for now to Greece, Ireland and Portugal, the Spanish 2 yr yield is rising to a 2 month high and their 10 yr yield is at a 1 month high.

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