China is Battling Inflation

which reached 8.7% in February. China raised bank reserve requirements to 15.5% in an attempt to bring inflation down to its 4.8% target. The stock market hit an eight month low as the Central Bank threatened to raise interest rates. The Yuan gained against the dollar.

Chinese equities will continue to get hammered as the government shifts their focus from juicing the economy for the Olympics, and fighting inflation that threatens to eclipse economic growth and cause civil unrest. Target for FXI: $60, FXP: $200+.