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CHINA: Country Wrap: China’s PPI and CPI Telling Two Different Stories.  

CHINA
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  •  Marriages in China plunged by a fifth to the lowest level on record last year, a setback to efforts by the government to reverse a demographic crisis threatening the world’s second-biggest economy. (source: BBG).
  • In out data preview last week we forecast two different stories coming from the PPI and CPI data releases over the weekend, and that certainly was the case.  Mired in deflation, PPI’s print was weaker than consensus at -2.3% (consensus -2.2%; prior -2.3%) and was the 28th month in succession of decline speaks to the absence of pricing power that corporates have.  CPI however tells a different story rising +0.5% YoY (consensus +0.4 ; prior +0.1%)the first rise since August last year.  The largest contributor to the rise was food prices up +0.4% and services +1.1%. (source: MNI – Market News).
  • China’s major bourses are starting off the week positively with the Hang Seng leading the way up 1.6%, CSI 300 +0.02%, Shanghai +0.39%, Shenzhen +0.63%.
  • CNY: Yuan Reference Rate at 7.1707 Per USD; Estimate 7.3017
  • Bonds:  Bond yields moved higher today with the CGB 10YR at 1.62%, +2bps. 
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  •  Marriages in China plunged by a fifth to the lowest level on record last year, a setback to efforts by the government to reverse a demographic crisis threatening the world’s second-biggest economy. (source: BBG).
  • In out data preview last week we forecast two different stories coming from the PPI and CPI data releases over the weekend, and that certainly was the case.  Mired in deflation, PPI’s print was weaker than consensus at -2.3% (consensus -2.2%; prior -2.3%) and was the 28th month in succession of decline speaks to the absence of pricing power that corporates have.  CPI however tells a different story rising +0.5% YoY (consensus +0.4 ; prior +0.1%)the first rise since August last year.  The largest contributor to the rise was food prices up +0.4% and services +1.1%. (source: MNI – Market News).
  • China’s major bourses are starting off the week positively with the Hang Seng leading the way up 1.6%, CSI 300 +0.02%, Shanghai +0.39%, Shenzhen +0.63%.
  • CNY: Yuan Reference Rate at 7.1707 Per USD; Estimate 7.3017
  • Bonds:  Bond yields moved higher today with the CGB 10YR at 1.62%, +2bps.