Expectations Mixed For Inflation Data

Inflation data due at 0130GMT/0930HKT

• Goldman Sachs are negative on the reading, citing food prices: "We expect the headline CPI to continue drifting lower in February, mainly due to further declines in food prices (pork and vegetables in particular). On the other hand, PPI inflation might increase further on higher commodity prices. We expect CPI inflation to fall to -0.4% yoy in February, from -0.3% yoy in January. This implies -0.5% month-over-month annualized growth in February, vs +4.8% in January. We expect PPI inflation to be higher at +1.6% yoy in February (vs. +0.6% in January). Sequential PPI inflation would be +6.4% month-over-month annualized, vs +15.5% in January."
• Morgan Stanley are more positive, forecasting a low base will offset lower food prices: "We expect CPI inflation to have edged up slightly, to -0.2% YoY in as February (vs. -0.3% in Jan), with the likely rebound in core inflation to 0.3% (partly due to a low base, vs. -0.3% in Jan-21) offsetting a decline in food inflation led by softer pork prices. Meanwhile, PPI could have risen to 1.8% YoY (vs. 0.3% in Jan21), as PPI MoM likely sustained at 0.9% (vs. 1% in Jan-21) given elevated levels in the February manufacturing PMI input and output price sub-indices."