MNI China Daily Summary: Wednesday, July 3

MNI BRIEF:BOJ Q1 Output Gap Hits 16th Negative Reading In Row

MNI: PBOC Sets Yuan Parity Higher At 7.1312 Weds; -0.34% Y/Y

MNI: PBOC Net Drains CNY248 Bln Via OMO Weds; Rates Unchanged

CHINA PBOC CONDUCTS CNY2 BILLION VIA 7-DAY REVERSE REPOS WEDS

CHINA SETS YUAN CENTRAL PARITY AT 7.1312 WEDS VS 7.1291

EZ/UK Bond Supply Calendar: Spain, France Auction on Thursday

PPI a Tenth Softer than Exp; Further NEIG HICP Disinflation to Come?

MNI: EUROZONE MAY PPI -0.2% M/M, -4.2% Y/Y

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

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

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CPI Close To Expectations, Core Inflation Moderates, But Rice Inflation Still High

PHILIPPINES
EM BulletDataHomepagemarkets-real-timeData BulletBulletEmerging Market News

Philippines May CPI was a touch below expectations in terms of the headline result. We printed at 0.1% m/m (0.2% forecast and -0.1% prior), while the y/y print came in at 3.9%, versus 4.0% expected and 3.8% prior.

  • Core inflation was 3.1% y/y down from April's 3.2% pace. This metric is closer to the mid-point of the BSP's target band of 2-4%, than the headline outcome.
  • Rice prices rose 23% y/y and is expected to remain elevated in the near term. The market will be waiting on details around a reportedly reduced tariff for rice (from 35% to 15%). Details remain light in terms of when this will be implemented but this could help alleviate headline food/aggregate inflation pressures
  • Aggregate food prices rose 5.8% y/y, versus 6.0% in April. Housing/utilities, along with transport, were the only categories to see a firmer y/y pace compared to April.
  • In m/m terms we saw a modestly firmer backdrop for most of the sub-categories, although transport fell -0.5%m/m.
  • The BSP stated that May data was in line with expectations and that average 2024/2025 inflation is expected to be on target. Governor Remolona stated that risks to the inflation outlook still rest to the topside. The next BSP meeting is on June 27.
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Philippines May CPI was a touch below expectations in terms of the headline result. We printed at 0.1% m/m (0.2% forecast and -0.1% prior), while the y/y print came in at 3.9%, versus 4.0% expected and 3.8% prior.

  • Core inflation was 3.1% y/y down from April's 3.2% pace. This metric is closer to the mid-point of the BSP's target band of 2-4%, than the headline outcome.
  • Rice prices rose 23% y/y and is expected to remain elevated in the near term. The market will be waiting on details around a reportedly reduced tariff for rice (from 35% to 15%). Details remain light in terms of when this will be implemented but this could help alleviate headline food/aggregate inflation pressures
  • Aggregate food prices rose 5.8% y/y, versus 6.0% in April. Housing/utilities, along with transport, were the only categories to see a firmer y/y pace compared to April.
  • In m/m terms we saw a modestly firmer backdrop for most of the sub-categories, although transport fell -0.5%m/m.
  • The BSP stated that May data was in line with expectations and that average 2024/2025 inflation is expected to be on target. Governor Remolona stated that risks to the inflation outlook still rest to the topside. The next BSP meeting is on June 27.