The Chinese inflation data dump has arrived as follows:
- CHINA JULY CPI +2.7% Y/Y (REUTERS POLL +2.9% )
- CHINA JULY CPI +0.5 PCT FROM PREVIOUS MONTH (REUTERS POLL +0.5 PCT)
- CHINA SAYS JULY FOOD CPI +6.3 PCT FROM A YEAR AGO; NON-FOOD CPI +1.9 PCT
- CHINA JULY PPI +4.2 PCT FROM A YEAR AGO (REUTERS POLL +4.8 PCT)
- CHINA JULY PPI -1.3 PCT FROM PREVIOUS MONTH
Producer inflation was expected to ease in July given the reversal in commodity prices, but the subdued household demand was expected to limit the pressure on consumer inflation, as analysts at Westpac explained.
As a consequence of the data, the Aussie is flat on the data. markets are awaiting US inflation data.
More to come…
About the Consumer Price Index
The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index. The purchase power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.