MNI China Daily Summary: Monday, October 14

MNI BRIEF: China Sep M2 Rises To Four-Month High

MNI BRIEF: China Foreign Trade Grow Steady; Exports +4.3% YTD

MNI BRIEF: China Foreign Trade Facing Pressure In Q4

CHINA YTD NEW LOANS CNY16.0 TRLN VS MEDIAN CNY16.3 TRLN: PBOC

CHINA SEP EXPORTS +2.4% Y/Y VS MEDIAN +6.0% Y/Y: CUSTOMS

EZ/UK Bond Supply Calendar: Luxembourg Synd; UK, FI Due Tuesday

MNI: CHINA YTD EXPORTS +6.2% Y/Y IN YUAN TERM: CUSTOMS

MNI BRIEF: China Sep CPI Slows To 0.4% Y/Y On Base Effects

CANADA: Politics Week: Parliament Opens With Early Election Threats

AUSTRALIA: Albanese Lines Up Budget for May Election

AUSTRALIA: Albanese Lines Up Budget for May Election

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CANADA: Scotia See Headline CPI Two Tenths Above Consensus

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  • Scotia see headline CPI slipping -0.1% M/M in NSA terms, translating to a seasonally adjusted 0.25% M/M increase. That should see year-ago inflation stay at 2% Y/Y, two tenths above consensus of 1.8.
  • “None of that matters” though. “What matters to the BoC is evidence on core inflation, especially its preferred trimmed mean and weighted median CPI gauges. Those readings picked up in August and are off their lowest readings from earlier in the year.”
  • “BoC officials have flagged that there is more work to be done to bring down these core inflation readings which doesn’t sound like policy officials who are in a rush to upsize cuts.”
  • “Unfortunately, it’s futile to attempt to forecast the gauges in m/m terms given the extreme sensitivities of the weighted median calculation that is derived from the 50th percentile price in the complete basket and given the trimmed mean measure’s sensitivity toward what gets removed each month in the top and bottom 20% of the basket. We don’t have the richness of price data to tell.”
  • “At present, markets are on the fence over whether the BoC will cut by 25bps or 50bps at the October 23rd meeting, but a cut is assured nonetheless. Consensus is somewhat divided on the magnitude of the reduction. […] The job market remains strong while consumer and business surveys of inflation expectations have improved but remain too high on balance. The CPI report will be used to finalize the call.”
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  • Scotia see headline CPI slipping -0.1% M/M in NSA terms, translating to a seasonally adjusted 0.25% M/M increase. That should see year-ago inflation stay at 2% Y/Y, two tenths above consensus of 1.8.
  • “None of that matters” though. “What matters to the BoC is evidence on core inflation, especially its preferred trimmed mean and weighted median CPI gauges. Those readings picked up in August and are off their lowest readings from earlier in the year.”
  • “BoC officials have flagged that there is more work to be done to bring down these core inflation readings which doesn’t sound like policy officials who are in a rush to upsize cuts.”
  • “Unfortunately, it’s futile to attempt to forecast the gauges in m/m terms given the extreme sensitivities of the weighted median calculation that is derived from the 50th percentile price in the complete basket and given the trimmed mean measure’s sensitivity toward what gets removed each month in the top and bottom 20% of the basket. We don’t have the richness of price data to tell.”
  • “At present, markets are on the fence over whether the BoC will cut by 25bps or 50bps at the October 23rd meeting, but a cut is assured nonetheless. Consensus is somewhat divided on the magnitude of the reduction. […] The job market remains strong while consumer and business surveys of inflation expectations have improved but remain too high on balance. The CPI report will be used to finalize the call.”