A snippet ahead of the Chinese inflation data, CPI and PPI for August, due today:
Via Xinhua:
- China's consumer price index (CPI) growth for August is expected to be 2.2 percent, according to China Merchants Securities (CMS)
- rise in food prices in August may push up CPI growth … affected by extreme weather during August and the outbreak of African swine fever in Anhui and Heilongjiang provinces
- China is aiming to keep annual CPI growth at around 3 percent this year
And, via Moody's:
- China's consumer prices likely cooled in August. Subdued inflation is giving Beijing the flexibility to keep fiscal and monetary stimulus measures in motion. The government has a tough job steering the economy through the headwinds from the trade war with the U.S. all the while managing softer domestic demand from its deleveraging quest
China's consumer prices likely cooled to 2% y/y in August, after 2.1% in July.
- Food inflation is tepid with pork prices a key drag; pork was down 9.6% y/y in July and this subtracted 0.24 percentage point from headline annual CPI growth. The government is targeting CPI of around 3% this year, unchanged from the goal in 2017. Subdued inflation is giving Beijing the flexibility to keep fiscal and monetary stimulus measures in motion. The government has a tough job steering the economy through the headwinds stemming from the trade war with the U.S. while managing softer domestic demand from its deleveraging quest.
Producer price inflation likely came in at 4.7% y/y in August, following the 4.6% gain in July.
- Higher commodity prices are driving producer price inflation, with mining and raw material goods increasing sharply over the year. Profit margins will likely rise, as factory prices have been under stress for the past year or so. The outlook for producer prices is tilted to the upside; the trade war between the U.S. and China could push up import costs. But so far, there's little evidence of trade war in the data
The data is due at 0130GMT:
- CPI expected 2.1%, prior 2.1% y/y
- PPI expected 4.0%, prior 4.6% y/y
