China's CPI rebounds to 0.3% m/m in July, beats estimates

According to the latest data published by China’s the National Bureau of Statistics (NBS), the Chinese Consumer Price Index (MoM) (July) came in at +0.3% vs +0.2% exp and -0.1% last, while Consumer Price Index (YoY) (July) 2.1% vs 1.9% exp and 1.9% last.

Meanwhile, China’s Producer Price Index (YoY) (June) arrived at 4.6% vs 4.4% exp and 4.7% last.

Key Details (via Reuters):

“Raw material prices jumped 9.0 percent in July from a year earlier, compared with an 8.8 percent increase in June.

The core consumer price index, which strips out volatile food and energy prices, rose 1.9 percent in July, unchanged from June’s pace.

The food price index rose 0.5 percent from a year earlier, after ticking up 0.3 percent in June. Non-food prices rose 2.4 percent, compared with 2.2 percent growth a month ago.”

Analysts at Nomura had expected, “CPI inflation to edge down further in July as high-frequency data suggest food price deflation widened modestly in the month, more than offsetting the seasonal increase in non-food price inflation implied by historical patterns….PPI inflation to soften in July as high-frequency data suggest largely stable prices of overall industrial products, while favourable base effects subside in Q3.” 

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 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.