China’s consumer price inflation likely to have accelerated in February, PPI to have slowed down

Chinese consumer price index and producer price index are expected to have risen in the month of February. According to a DBS Bank research report, consumer price inflation is likely to have come in at 2.4 percent year-on-year, while producer price index is expected to have come in at 3.8 percent.

Food inflation is expected to have recovered, because of low base effects and the difference in timing of the Lunar New Year. But, weak pork prices, given rising supply, would continue to contain the upward pressure. On the production prices front, PPI inflation is expected to have eased further from high base effects.

In the meantime, both exports and imports are expected to have risen 8 percent year-on-year in February. The expected deceleration was partially linked to the holiday distortions. Subdued foreign demand might also have dragged down the export figure, as implied by the earlier manufacturing purchasing managers’ index indicators.

“Import growth would have eased back to a single digit, due to relatively slower growth in oil imports amid a warmer February. We forecast a trade deficit of US$11.8bn for February”, added DBS Bank. 

At 14:00 GMT the FxWirePro's Hourly Strength Index of Chinese Yuan was neutral at -4.38258, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 27.5091. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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