Market Highlight 10.07.2026

Inflation in China stalled in June, providing a positive signal for the global macro outlook. Although the low-base effect from 2025 caused inflation in the production sector to continue rising, factory-gate production costs fell by 0,3% from May, marking the first decline since July 2025. Core CPI, which excludes food and energy prices, fell to 1% in June, a sign that domestic demand is weakening even as trade activity is booming. As the global economy faces rising energy prices due to tensions in the Middle East, cooling production costs in China are a positive signal. China’s producer price index has historically had a close correlation with export prices, and at present no economy wants to absorb additional inflation pressure from imports. 

However, for China’s economic outlook, as well as for businesses and economies that depend on demand from this market, stalled inflation signals that economic weakness may persist.
Three months ago, economists at the International Monetary Fund (IMF) were concerned that a prolonged conflict in Iran could push the global economy into recession. The temporary peace agreement in June partly removed this risk. According to the IMF’s latest forecast, global economic growth may be slightly weaker, but long-term damage will be limited. As an artificial intelligence (AI) powerhouse and also one of the world’s leading oil exporters, the U.S economy is likely to maintain solid growth momentum, reaching +2,3% this year, unchanged from the IMF’s April forecast, and +2,2% next year.

Domestically, interbank USD/VND saw little movement and traded mainly around 26.290 - 26.300 yesterday.

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