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Economic Data Signals Turnaround, Stability in China

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A surprise rebound in Chinese producer-price inflation buoys markets, all eyes are on U.S. retail data, and a $100 billion tech-investment fund is born. Here are some of the things people in markets are talking about today.

China inflation

China's factory-gate prices rose for the first time since January 2012, easing fears that the country is contributing to disinflation around the world, and fueling hopes the economy is on an even keel. Producer price inflation posted a 0.1 percent year-on-year gain in September compared with expectations of a 0.3 percent drop. Consumer price inflation, after falling for four consecutive months, also rose 1.9 percent last month from a year earlier, above market expectations. Analysts expect Chinese inflationary pressures to remain subdued in the near-term as Beijing redoubles efforts to reduce excess capacity and address large-scale imbalances in key industries.

U.S. retail data

The most anticipated data release of the week — the September U.S. retail sales report — will be posted at 8:30 a.m. in New York. With consumers doing all the heavy lifting for U.S. GDP amid a weak investment cycle, the data will shed light on economic momentum in the third quarter. Economists polled by Bloomberg forecast that a headline retail sales rise of 0.6 percent in September, compared with a 0.3 percent contraction in August. The report will be followed by U.S. inventories data — with the pace of stockpiling highlighting anticipated aggregated demand — and the preliminary University of Michigan consumer-sentiment survey for October, both at 10:00 a.m. Federal Reserve Chair Janet Yellen will then deliver a keynote speech at the Boston Fed's annual economic conference at 1:30 Eastern Time, providing her with an opportunity to reinforce market expectations for a rate hike this year.

Markets cheer

Global equities rebounded after China's inflation data eased concerns over yesterday's weak trade report, and the yen fell amid diminished safe-haven demand. Benchmark U.S. 10-year Treasury yields climbed to 1.77 percent, offsetting yesterday's losses, while West Texas Intermediate crude for November delivery was trading higher at $51 a barrel as of 6:21 New York time.

U.S. bank earnings

JPMorgan Chase & Co., Wells Fargo & Co., and Citigroup Inc. kick off the third-quarter earnings season for U.S. lenders, with analysts expecting a rebound in fixed-income trading revenue to offset cyclical weakness in equities and soft loan growth. Much of the focus will likely fall on Wells Fargo, whose chief executive quit on Wednesday amid a scandal over fake consumer accounts

$100 billion tech fund

SoftBank Group Corp. and Saudi Arabia's sovereign wealth fund will launch a new tech fund that could invest as much $100 billion, a move that would create one of world's largest technology-investment vehicles. Softbank's ambitious founder Masayoshi Son will likely play a key role in the new fund's strategy, possibly backing companies at all stages in a wide-ranging number of sectors from semiconductors to electronic components to software, analysts said.

What we've been reading 

This is what's caught our eye over the last 24 hours.

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