China CPI speculation boosts emerging markets

Rising emerging market stocks have boosted the MSCI EM index to its highest level in two and a half years, on speculation China's inflation eased last month.

Government data on China's CPI is due out tomorrow and there is speculation these results will show inflation has cooled, meaning less tightening will be needed, Bloomberg reports. The government's report could reveal December's inflation slowed to a pace of 4.6%, decreasing from 5.1% in November, based on the median of economists surveyed by Bloomberg. China's inflation rate may have been reined in by the central bank raising interest rates twice, and increasing the reserve ratio for lenders four times in the space of only two months. A measure of China's industrial companies also...