China: CPI and PPI (Oct 2012)
Xingdong Chen - Market Economics
Asian Instant Insight | 09 Nov 2012 03:43 |
CPI eased to a 33-month low of 1.7% y/y and PPI deflation improved to -2.8% y/y. We believe both CPI and PPI have bottomed. But through the year end, CPI would stay mild and PPI continue to be negative. However, policymakers have concerns over inflation next year on the back of economic recovery and monetary easing in developed nations. The need and odd of another cut in interest rate is diminishing along with economic rebound in Q4. Nevertheless, we still expect authorities to maintain the accommodative policy stance to protect the green shoots by ensuring adequate market liquidity and enhancing transmission of monetary policy.
The headline consumer inflation number matched the forecast of economists polled by Reuters. Free PPI Claims
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