Chinese CPI below 1% YoY first time since March 2017

Ross J Burland FXStreet

The Consumer Price Index is released by the National Bureau of Statistics of China and has slowed to below 1% for the first time since March 2017.

China October CPI increases at slowest YoY pace since Oct 2009 the China Statistics Bureau explained.

AUD was unchanged on the release, trading at 0.7277 in a 20 pip consolidation range in the Asian session.

Chinese CPI and PPI

China October CPI +0.5 pct from a year ago (Reuters poll +0.8 pct).
China October CPI -0.3 pct from previous month (Reuters poll +0.2 pct).
China says October food CPI +2.2 pct from a year ago; non-food CPI 0.0 pct.

Description of 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.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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