MNI China Daily Summary: Friday, April 26

MNI BRIEF: China, US Should Strengthen Dialogue, Cooperation

MNI BRIEF: SNB Framework Reform 'Playing With Fire' - Steiner

MNI: PBOC Conducts CNY2 Bln Via OMO Fri; Liquidity Unchanged

CHINA PBOC INJECTS CNY2 BILLION VIA 7-DAY REVERSE REPOS FRI

MNI: PBOC Sets Yuan Parity Lower At 7.1056 Fri; -4.56% Y/Y

MNI: BAKER HUGHES US RIG COUNT 613; OIL RIGS 506; GAS RIGS 105

MNI: UNIV OF MICHIGAN CONSUMER SENTIMENT FINAL APR INDEX 77.2

EZ/UK T-Bill Calendar: Germany, France Auction on Monday

RPT-MNI: Canada Sticks To Fiscal Anchors, Spends Chunk Of Windfall

MNI BRIEF: Poilievre Calls QE 'Scam' And Would Limit BOC Remit

MNI: Growth Drag From Net Zero Carbon Goal Can Be Offset-OECD

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CPI Ahead – 0830ET

CANADA
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  • Bloomberg consensus sees headline CPI rising two tenths to 3.1% Y/Y in February. The broad range is 2.9-3.1% but with S&P an outlier at 2.5.
  • The median and trim average meanwhile is seen holding at 3.35% Y/Y at what was the lowest print since late 2021.
  • TD agree on headline but see the core measures firm a tenth to 3.45% on average, despite 3-mth rates holding unchanged at 3.2% annualized.
  • Both 3-mth and Y/Y rates are important here: Gov. Macklem was keen to point out earlier this month that the Bank needs to see a further easing in median and trim figures which as he noted were running at 3.3/3.4% Y/Y and a similar rate in three-month terms in Jan.
  • The Bank has recently explicitly put more weight on a range of underlying inflation measures but still formally refers the median and trim measures.
  • When asked about this by MNI in the Q&A, Macklem said “We are comfortable with our preferred measures of core inflation. We’ve been using this term underlying inflation because it reflects what we’re seeing in a whole range of indicators rather than people getting fixated on one number. Yes, our preferred measures are important, but we also look at alternate measures (CPIxFE, CPIX) and the whole distribution of price changes where still ~45% of the basket is rising above 3%, roughly double what is normal”.
  • On these other measures, CIBC look for CPIxFE to rise 0.3% M/M SA. We calculate that rounded figure as seeing the 3-mth rate cool further to just 2.3% annualized after moderating sharply in Jan.
  • This is the sole CPI report in the narrow window between the Mar 6 and Apr 10 decisions, although we are still to see monthly GDP, the BoC's BOS/CSCE surveys and another labour report before then.
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  • Bloomberg consensus sees headline CPI rising two tenths to 3.1% Y/Y in February. The broad range is 2.9-3.1% but with S&P an outlier at 2.5.
  • The median and trim average meanwhile is seen holding at 3.35% Y/Y at what was the lowest print since late 2021.
  • TD agree on headline but see the core measures firm a tenth to 3.45% on average, despite 3-mth rates holding unchanged at 3.2% annualized.
  • Both 3-mth and Y/Y rates are important here: Gov. Macklem was keen to point out earlier this month that the Bank needs to see a further easing in median and trim figures which as he noted were running at 3.3/3.4% Y/Y and a similar rate in three-month terms in Jan.
  • The Bank has recently explicitly put more weight on a range of underlying inflation measures but still formally refers the median and trim measures.
  • When asked about this by MNI in the Q&A, Macklem said “We are comfortable with our preferred measures of core inflation. We’ve been using this term underlying inflation because it reflects what we’re seeing in a whole range of indicators rather than people getting fixated on one number. Yes, our preferred measures are important, but we also look at alternate measures (CPIxFE, CPIX) and the whole distribution of price changes where still ~45% of the basket is rising above 3%, roughly double what is normal”.
  • On these other measures, CIBC look for CPIxFE to rise 0.3% M/M SA. We calculate that rounded figure as seeing the 3-mth rate cool further to just 2.3% annualized after moderating sharply in Jan.
  • This is the sole CPI report in the narrow window between the Mar 6 and Apr 10 decisions, although we are still to see monthly GDP, the BoC's BOS/CSCE surveys and another labour report before then.