MNI China Daily Summary: Wednesday, December 11

MNI BRIEF: Chinese Rail Passenger Numbers Break Record

MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI: US NOV CPI 0.3%, CORE 0.3%; CPI Y/Y 2.7%, CORE Y/Y 3.3%

MNI: US NOV SUPERCORE CPI (CORE SERVICES EX-HOUSING) 0.342%

MNI: US NOV CPI UNROUNDED M/M 0.313%, CORE 0.308%

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

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JPMorgan on BCRP: Sees 50Bps Hike To Prevent CPI Expectations De-Anchoring

PERU
  • Headline CPI jumped higher again, to 5.23% y/y from 4.95% in August, and 3.26% in June. That is, 223bp above the BCRP inflation target ceiling. In the last four months (Jul-Sep), inflation accumulated 2.94%, above the BCRP target for a whole year (2%).
  • Following the September upside CPI surprise JPM expect the BCRP to hike the policy rate again this week, by 50bp to 1.5%, so to narrow both the ex-post and ex-ante real rate.
  • But the Board is likely to face other medium-term challenges. In addition to the inflationary spike, the central bank is also likely to be challenged by regulation changes impacting financial markets and relative prices. For example, the government and Congress aim to reform the pension system regime, which could have material impact on market prices.
  • Relatedly, regulatory risk is high against the backdrop of a more interventionist flavoured administration.
  • Last but not least, the risk of a Constitution reform via an Assembly, together with political uncertainty, should continue to exert pressure on financial variable premia (FX and term premia), which should require higher real monetary policy rates when controlling for output gap in the past.
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