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Price Increases Soften From Previous Month

CNH

Limited reaction seen in the immediate aftermath of inflation figures, CPI rose 1.1%, slightly below estimates of 1.2% and down from 1.3% in May. PPI rose 8.8%, in line with estimates and down from 9.0% in May. USD/CNH down 58 pips at 6.4877 from around 6.4890 pre-announcement. Slightly lower CPI figures could clear the way for the PBOC who have intimated a switch in policy bias with discussion of a targeted RRR cut and supportive fiscal measures.

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