MNI China Daily Summary: Friday, April 26

MNI BRIEF: China, US Should Strengthen Dialogue, Cooperation

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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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Inflation data due at 7:00BST

UK DATA
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  • The consensus looks for the same 3.1%Y/Y headline CPI print as the Bank of England's February MPR (down from 3.4%Y/Y in February). Consensus expects services CPI to fall 0.3ppt to 5.8%Y/Y (again in line with the BOE forecast) while core CPI is expected to decline 0.4ppt to 4.1%Y/Y.
  • Easter impacts (particularly for air fares) carry the most uncertainty in today's print – and it appears as though most forecasters look for a rather benign impact from this, so there is probably a bit more scope for an upside than a downside surprise today.
  • There is a slight skew towards a higher services inflation print, relative to the median expectation for 5.8%Y/Y, with 5/14 analysts looking for a higher print and 4/14 analysts looking for a lower print.
  • Higher air fares could drive an upside surprise, as could accommodation prices (which were also cited as an upside risk last month but rose less than some had expected). We remain concerned about the breadth of services price increases, however.
  • Core goods are expected to see continued disinflation (only 4 analysts forecast this and look for 1.2-1.5%Y/Y from 1.9%Y/Y in February, while food prices are also expected to disinflate (from 6.7%Y/Y to around 5.7-5.8%Y/Y). There appear to be downside risks to both of these categories from wider survey data and from moves seen in eurozone flash inflation data.
  • Energy will lead to a positive contribution to headline inflation as petrol prices rose in March 2024 but fell in the same month last year – there will be no notable change in gas/electricity prices until April when there will be further energy deflation.
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  • The consensus looks for the same 3.1%Y/Y headline CPI print as the Bank of England's February MPR (down from 3.4%Y/Y in February). Consensus expects services CPI to fall 0.3ppt to 5.8%Y/Y (again in line with the BOE forecast) while core CPI is expected to decline 0.4ppt to 4.1%Y/Y.
  • Easter impacts (particularly for air fares) carry the most uncertainty in today's print – and it appears as though most forecasters look for a rather benign impact from this, so there is probably a bit more scope for an upside than a downside surprise today.
  • There is a slight skew towards a higher services inflation print, relative to the median expectation for 5.8%Y/Y, with 5/14 analysts looking for a higher print and 4/14 analysts looking for a lower print.
  • Higher air fares could drive an upside surprise, as could accommodation prices (which were also cited as an upside risk last month but rose less than some had expected). We remain concerned about the breadth of services price increases, however.
  • Core goods are expected to see continued disinflation (only 4 analysts forecast this and look for 1.2-1.5%Y/Y from 1.9%Y/Y in February, while food prices are also expected to disinflate (from 6.7%Y/Y to around 5.7-5.8%Y/Y). There appear to be downside risks to both of these categories from wider survey data and from moves seen in eurozone flash inflation data.
  • Energy will lead to a positive contribution to headline inflation as petrol prices rose in March 2024 but fell in the same month last year – there will be no notable change in gas/electricity prices until April when there will be further energy deflation.