China's CPI drops to 0.2% m/m in October, meets estimates

According to the latest data published by China’s the National Bureau of Statistics (NBS), the Chinese Consumer Price Index (MoM) (October) eased to +0.2% vs. +0.2% exp and +0.7% last while Consumer Price Index (YoY) (October) steadied at 2.5% vs. 2.5% exp.

Meanwhile, China’s Producer Price Index (YoY) (October) arrived at 3.3% vs. 3.4% exp and 3.6% last.

Key Highlights (via Reuters):

“Raw material prices increased 6.7 percent in October from a year earlier, down from a 7.3 percent gain in September.

Underlying factory-gate inflation in recent months has been crimped by easing consumption, with China’s fixed-asset investment growth hovering around record lows and industrial firms’ profits falling since May.

Beijing’s clamp-down on financial risks had also slowed credit demand somewhat, while some mid-sized companies have struggled to pass on higher prices to consumers. “

About China CPI

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 purchasing 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.

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