Inflation data from China for December 2023

Very weak numbers, deflation y/y and barely positive m/m.

china cpi ppi December 2023

Monthly PPI -0.3%

  • prior -0.3%

China's consumer prices extended their decline for a third month. Factory gate prices (PPI) drive home the point of persistent deflationary pressures in China. The economy is recovering, but its patchy.

The point many make (including me) is that inflation is not an impediment to further easing from the People's Bank of China. Which is true but misses the fear over a weaker yuan:

In that post you'll note I said the PBOC may well be left with no choice but to ease though ... and that's whats expected next week: