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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 DATA
China May inflation figures are on tap today. The market consensus for CPI y/y is 0.2%, versus 0.1% prior (note the range of forecasts is -0.2% to +0.5%). For the PPI, the market expectation is -4.3% y/y, versus -3.6% in Apr (note the range of forecasts is -3.8% to -4.8%).
- Current headline CPI pressures are barely positive, whilst core inflation is painting a slightly more resilient picture, last at 0.7%, albeit broadly tracking sideways.
- Official PMI prints for May showed sharply weaker input and output prices measures across the manufacturing and services sectors. The Caixin PMIs weren't as downbeat on price measures though.
- Any downside surprise in terms of the CPI is likely to intensify easing speculation. China interest rates have generally been biased lower over the past month, the 2yr government bond yield from around 2.40% back to 2.10%, the 10yr yield is also lower, but holding above 2.70%.
- The PPI is set to slip further into negative y/y territory. This fits with the weaker global commodity price backdrop. The chart below overlays the PPI raw materials y/y sub index against spot commodity prices y/y.
Fig 1: China PPI Raw Materials Y/Y Versus Global Spot Commodity Prices Y/Y
Source: MNI - Market News/Bloomberg
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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