Nasdaq Correction Continues As Weak China Data & US CPI Weigh

China CPI Drops AgainFears over the health of the Chinese economy have moved back into the spotlight this week. On the back of data yesterday showing that Chinese exports contracted for the third consecutive month, inflation data overnight was equally disappointing. Annualised CPI came in at -0.3% last month, down from 0% prior while PPI was seen at -4.4%. The data underscores the deflationary trend which has taken hold in China on the back of the country easing covid restrictions at the start of the year. While price pressures were upward initially as activity increases, the subsequent drop off in activity and demand has fuelled a deflationary spiral which is worrying investors.US CPI On WatchThe focus on weakness in China data has added to bearish risk sentiment recently. With the Chinese government yet to announce any sort of sweeping fiscal package, for now stocks have lost a lot of recent bullish momentum. Tomorrow’s US CPI release is also creating a lot of uncertainty. On the back of recent hawkish Fed comments, traders are wary of a fresh surge higher in USD should the data show any stickiness or surprise upside in inflation, which would weigh on stocks further at this point.Technical ViewsNasdaqThe correction lower in the Nasdaq from the 16010.4 level has seen the market trading back down to test support at the 15177.5 level. This is a key support area for the index and while this holds, the outlook remains bullish in favour of an eventual break of current YTD highs. Below here, however, 14288.2 is the next support to note along with the bull channel lows.