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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
CHINA
- China inflation once again surprised positively in August, with the PPI coming in higher than expected at 9.5% YoY (vs. 9% exp.), up from 9% the previous month and surging to a 13-year high.
- However, the chart below shows that the significant contraction in Chinese 'liquidity', which we define as the annual change in Total Social Financing (TSF) 12M sum, is currently pricing in a fall in inflation in the coming months.
- We have recently seen that inflation has started to decelerate in a rising number of Asian and SE Asian countries in the past few months (Malaysia, Vietnam, Philippines and Thailand).
- Hence, a shift towards a disinflationary environment will be very important for asset managers who can then allocate their capital more smartly, increasing weights on sectors / countries which tend to outperform in periods of decelerating inflation and deteriorating economic activity.
- As a reminder, we follow PPI more closely in China (instead of CPI) due to its strong relationship with China 10Y yield in the past 15 years.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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