a look at the day ahead in us and global markets from mike dolan if there were still doubts about a reacceleration of the world economy into 2023 chinas february business boom likely put them to rest and after a bruising setback for stocks and bonds in february investors now have to assess whether the unfolding economic rebound is sustainable given the eyewatering revision that its forcing in inflation and interest rate expectations chinas manufacturing activity expanded at the fastest pace in more than a decade in february smashing expectations as production zoomed after the lifting of covid19 restrictions the abrupt lifting of covid curbs appears to have bookended one of the worst years for the worlds secondlargest economy in nearly half a century after its bleakest february in 40 years hong kongs hang seng stock index hsi roared back more than 4 on wednesday with shanghai ssec up 1 too chinas offshore yuan also surged 1 against the dollar and against increasingly tense geopolitics the rebound will be a relief to beijing as chinas annual parliament opens on sunday and president xi jinping tightens control with the biggest government reshuffle in a decade for the rest of world markets jarred by increasingly uncomfortable inflation readings from europe and the united states the question is how much chinas reopening staves off recession or just spurs commodity and input prices once more with euro zone factory output also now expanding again for the first time since may german state inflation readings on wednesday appeared to tally with data showing annual price rises picking up steam again last month this is emboldening both the hawks at the european central bank and markets keen to reprice the interest rate horizon goldman sachs raised its estimate for peak ecb interest rates for the second time in as many weeks saying it now expects rates to go up by 50 basis points at the may meeting taking the terminal rate to 375 by june money markets have already moved beyond that and now price peak ecb rates at yearend almost 150 bps higher at 390 even though us consumer confidence and housing data on tuesday questioned some of the reheating narrative markets now assume peak federal reserve rates will be as high as 542 by july twoyear treasury yields pushing to their highest in almost four months to 486 inflation expectations in markets are also on the rise in the united states and europe with 5year 5year forward inflation swaps in the latter near 25 for the first time in at least 13 years the euro surged against the dollar on wednesday it gained against sterling too as britain as so often this year struck a gloomier note uk house prices last month dropped in annual terms for the first time in nearly three years mortgage lender nationwide said and homebuilder persimmon psnl dropped almost 10 after it warned the housing slowdown and higher mortgage rates would hit profit and homebuilding targets european bourses and us stock futures were marginally higher however tesla tslao is readying a production revamp of its topselling model y according to reuters sources chief executive elon musk has said he will discuss the third part of the ev makers master plan when the company holds an investor day event later on wednesday frankfurtlisted shares of covid19 vaccine maker novavax nvaxo fell 26 on wednesday after the company raised doubts the day before about its ability to remain in business bnp paribas bnpppa fell 29 after the belgian state participation agency sfpi said the country is preparing the sale of a third of its 78 equity stake in the bank euronext enxpa has withdrawn its 55 billion euro 59 billionindicative offer to buy fund distribution firm allfunds allfgas key developments that may provide direction to us markets later on wednesday  us and global feb manufacturing surveys us jan construction spending