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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.
CHINA
- In the past few months, we have seen that inflationary pressures have been rising sharply in China, with PPI inflation surging to a 13-year high of 9.5% YoY in August.
- The positive surprise in inflation, which has been mostly driven by trending commodity prices and higher shipping costs, has led to growing concerns over stagflation risks.
- On one hand, the sharp contraction in China credit impulse is pricing in a disinflationary outlook in the coming 6 to 12 months.
- The top chart shows that China 'liquidity', defined as the annual change in Total Social Financing 12M sum, has acted as a strong 9M leading indicator of Chinese inflation (PPI) in the past 15 years.
- On the other hand, the rise in energy commodities with coal futures rising to record levels could continue to send China inflation to new highs in the near term.
- The bottom chart shows that coal futures and China PPI inflation have co-moved strongly in the past cycle.
Source: Bloomberg/MNI
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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