We’ve just had the CPI and PPI data from China today (link is here: China data – CPI for October +1.6% y/y (vs. expected +1.6%), but, in brief CPI +1.6% y/y and PPI -2.2% y/y).
China Merchants Bank’s senior analyst Dongliang Liu (via Bloomberg) says that
- the CPI results reflects the effect of weak demand,
- while the negative PPI continues to pose further headwinds to upstream industries and increase credit risks there
- Says further that low inflation could allow the People’s Bank of China (PBOC) to further increase efforts to ease monetary policy and may lead a cut in official rates
