MNI DATA IMPACT: China March CPI Positive; PPI Near 3-Y High

China's inflation rose 0.4% y/y in March, reversing the 0.2% fall in February due to the lower comparison base with the same period last year. The result is basically in line with the median forecast of 0.3%.

The Producer Price Index, another key indicator measuring factory gate prices, jumped to 4.4% y/y from February's 1.7% gain, outshining the 3.6% forecast and registering the highest since July 2018, according to data released by the National Bureau of Statistics on Friday.

Here are the key takeaways:

• Food prices fell further by 0.7% y/y from February's 0.2% decline, dragging down the headline CPI by 0.12 percentage points. Non-food prices, mainly gasoline and diesel, rose 0.7% y/y to reverse the previous 0.2% fall, pulling up the CPI by 0.56 pp.
• Pork prices, the main inflation driver in the past year, fell 18.4% y/y on the high base last March, further expanding from the previous 14.9% decline as hog production continues to recover.
• The CPI fell 0.5% m/m, compared with last month's 0.6% gain, affected by the seasonal fall in demand after the Spring Festival in February.
• The core CPI, excluding food and energy prices, was up 0.3% y/y in March, recovering from the previous 0.0%.
• The PPI grew 1.6% m/m, accelerating from the 0.8% reported last month, as domestic demand continues to improve and prices of international commodities including crude oil and non-ferrous metals continue to rise.