Chinese Consumer Price Index YoYand MoM for January has been released as well as the Producer Price Index YoY.
CPI and PPI
China January PPI +0.1 pct from a year ago (Reuters poll +0.1 pct).
China January PPI 0.0 pct from previous month.
China January CPI +5.4 pct from a year ago (Reuters poll +4.9 pct).
China January CPI+1.4 pct from previous month (Reuters poll +0.8 pct).
China says January food CPI +20.6 pct from a year ago; non-food cpi +1.6 pct.
China's producer prices in January rose 0.1% year-on-year, official data showed on Monday, marking the first pickup since May 2019. Analysts had expected factory-gate prices to rise 0.1% from a year earlier, compared with a 0.5% drop in December. Consumer prices rose 5.4% year-on-year compared with a 4.9% rise tipped by a Reuters poll of analysts and a 4.5% rise in December. The pace is the fastest since October 2011,
– Reuters explained.
Market implications
While the CPI was the fastest rise since October 2011, markets initially did not react, perhaps as one might consider that the data doesn't tie-up with the true situation in China and the implications of the coronavirus. However, in a delayed response, AUD managed to extend its corrective trajectory, potentially triggering tight stops to 0.6889, the high of the Asian session so far.
The coronavirus is taking up the attention of markets and how the contagion could spread throughout the world and affect the global economy. As for the Chinese, the authorities are using extra fiscal budgets and central bank lending to fight the effects of the virus. These measures help to take some of the downside impacts in currencies such as the Aussie, but that tends to be short-lived and AUD will continue to find pressures until there is a solution and the virus is eradicated.
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