MNI China Daily Summary: Tuesday, December 10

MNI BRIEF: China Nov Exports Slows, Imports Slide

MNI BRIEF: China Crude Oil Imports Accelerate In November

CHINA NOV EXPORTS +6.7% Y/Y VS MEDIAN +8.9% Y/Y: CUSTOMS

MNI: CHINA YTD EXPORTS +6.7% Y/Y IN YUAN TERM: CUSTOMS

MNI: PBOC Net Injects CNY90.3 Bln via OMO Tuesday

MNI: GERMAN NOV CPI +2.2 % Y/Y

MNI: NORWAY NOV CORE CPI +0.1% M/M, +3% Y/Y

MNI: NORWAY NOV CPI +0.3% M/M, +2.4% Y/Y

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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Potential Reactions To CPI Report

US OUTLOOK/OPINION
[The below taken from the MNI CPI Preview. Full note found here]
  • An upside surprise, with even another ‘low’ 0.4% if driven by areas away from PPI-relevant categories (which could limit the impact from any supercore surprises this month), could bring 5% 2Y Treasury yields back into play again.
  • Expect sizeable resistance at this level though, having struggled to hold a sustained break on multiple occasions over the past month.
  • The longest foray into a 5 handle was after the surprisingly strong ECI data for Q1 on Apr 30, reaching a high of 5.043%, before it slipped below with the FOMC on May 1 and it hasn’t tested it since.
  • Instead, it reached a snap low of 4.708% after payrolls on May 3 – demonstrating the heightened sensitivity to softer labor data – but is currently back at 4.85% after some upside inflationary surprises.
  • This 5% level could still see a firm test though as it would be seen as further evidence that the start-of-year acceleration is more than just a bump in the disinflationary path back towards 2% PCE inflation.
  • We imagine this would come from a further delay in the start point of rate cuts rather than outright expectations of a near-term hike.
  • An inline reading of around 0.30% M/M would further dial up attention on labor data.
  • Markets will still clearly be sensitive to a downside surprise of 0.2% M/M but after three months averaging 0.37% M/M for core CPI, the onus is clearly on seeing multiple softer inflation readings as various FOMC members have said.
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