We had Chinese trade data over the weekend:
Today we get inflation data. China’s deflation story appears to have run its course, with both consumer and producer prices having turned positive on a year-over-year basis in March, and April’s data due today is expected to broadly sustain that shift, albeit with some moderation at the headline level.
Analysts forecast China’s April CPI at around 0.8% to 1.0% year-on-year, easing slightly from the 1.0% recorded in March as the demand boost from the Lunar New Year holiday period fades from the comparison base. Core CPI, which strips out volatile food and energy components, is expected to hold in a narrow range of around 1.1% to 1.2%, a reading that would point to continued softness in underlying domestic consumer demand despite the broader stabilisation in prices.
The more closely watched figure for energy markets is likely to be the producer price index, where the recovery from a prolonged deflationary stretch has been more pronounced. PPI is forecast to push further into positive territory, with estimates ranging from around 1.5% to 1.9% year-on-year, driven by rising energy and commodity input costs. That would extend a rebound that analysts have linked in part to elevated global energy prices tied to the ongoing Iran war and its disruption to supply chains feeding Chinese industry.
The divergence between a softening headline CPI and a firming PPI will be a key dynamic for markets to watch, as it speaks to the uneven nature of China’s price recovery and the degree to which rising input costs are being absorbed by producers rather than passed through to consumers.
- This snapshot from the investingLive economic data calendar.
- The times in the left-most column are GMT.
- The numbers in the right-most column are the ‘prior’ (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.