Wednesday, November 9, 2011

China's CPI Release

 China's Consumer Price Indices in October

Albeit, still high, the CPI is trending down for the past 3 mths.
At 5.5%, and with the Eurozone in crisis, the policymakers will likely take their foot off the brakes on Monetary policies tightening.

China's Producer Price Indices in October

Reading the PPI figures, in tandem with the CPI figures, confirms the downward trend in prices.
PPI is a strong predictor of CPI trends and the sharply falling growth trend in the PPI augurs a soft landing for the Chinese inflation picture.


My Thots.....

Many of the SMEs, especially local S-chips who are suffering from the recent credit squeeze caused by higher interest rates and higher RRRs, as well as a rising RMB, will be able to breathe better going forwards, as the Chinese policy makers adjust to a more pro-growth stance and ease the tighthening measures.

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