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China Economy to Rebound in H2: Ex-PBOC Off'l

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Deutsche expects "sturdy gains" for both headline (+0.81% M/M) and core (+0.67% M/M) November inflation, putting them well above consensus. They see headline boosted by gasoline prices, with used cars posting a "strong gain given the lags to wholesale prices".

  • Most notable to watch for markets - and the Fed, they write - will be primary rents and OER, each of which Deutsche see rising 0.4% M/M.

Wells Fargo is a little above consensus on November core CPI at 0.6% M/M, with persistent goods inflation pressure a continuing theme: "prices for items ranging from vehicles and household furnishings to sporting goods saw sizable increases in October, and with the holiday season upon us, we doubt goods prices will cool in the near term".

  • They also see services prices gaining momentum: "solid gains in shelter costs and medical care are just starting to pick up, underscoring that price pressures are broadening beyond just the industries most acutely affected by the pandemic."