10 Mar 2015
China March data to show renewed signs of disinflation – Rabobank
FXStreet (Barcelona) - The Rabobank Team reviews the Chinese CPI release, noting that the timing of the Chinese New year has led to distortion in the data, further expecting March numbers to show renewed signs of disinflation in the country.
Key Quotes
“After falling to a five-year low of 0.8% in January, China’s CPI inflation rebounded last month to 1.4% YoY, much stronger than the consensus forecast.”
“Again, as with virtually all Chinese Jan-Feb data, the shifting timing of Chinese New Year from January to February distorts the data significantly. Illustratively, food price inflation was up 2.4% on the year (and just 1.1% in January), indicating that vegetable and fruit process rose sharply in anticipation of the festivities.”
“That said, we expect the March data to show renewed signs of Chinese disinflation, reflecting the broad weakness in global commodity prices.”
Key Quotes
“After falling to a five-year low of 0.8% in January, China’s CPI inflation rebounded last month to 1.4% YoY, much stronger than the consensus forecast.”
“Again, as with virtually all Chinese Jan-Feb data, the shifting timing of Chinese New Year from January to February distorts the data significantly. Illustratively, food price inflation was up 2.4% on the year (and just 1.1% in January), indicating that vegetable and fruit process rose sharply in anticipation of the festivities.”
“That said, we expect the March data to show renewed signs of Chinese disinflation, reflecting the broad weakness in global commodity prices.”