China's industrial recovery is 'welcomed at this point'

The Producer Price Index (PPI) for June saw prices for domestic producers rise 0.2% month-over-month and 2.6% year-over-year, according to the US Bureau of Labor Statistics.

Goldman Sachs Global Investment Research head of the European capital goods team Daniela Costa joins Catalysts to give insight into the latest inflation data and how it correlates to global economic trends.

Costa lays out why European markets are looking more towards China for recovery to see improvements:

"I think some of the the weak data that we have seen — particularly in Europe where many of the big manufacturers are importantly dependent on China — I think that the worry has actually been more that if that growth is not there, what are we going to see? Are we going to see excess capacity? And will we actually move into a deflationary territory in industrials, which we haven't been for a while, so a recovery in China is probably welcomed at this point. It's also, I think, welcomed in the fact that local domestic utilization needs to increase in several sectors."

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This post was written by Nicholas Jacobino