China: Inflation numbers disappoint – TDS

Analysts at TDS note that China’s Mar CPI at 2.1%/yr came in below the 2.6%/yr market forecast and 2.9%/yr prior print, while the PPI at 3.1%/yr also came in below the 3.3%/yr forecast.

Key Quotes

“China's Stats bureau indicated the decline was primarily due to the Lunar New Year holiday as a result today's outcome should not have much of an implication for policy, especially as officials are likely to focus on trimming leverage over the coming year.”

“There was nothing in PBoC Gov Yi's speech to move the market. His speech discussed an increase in the stock connect, a further opening of foreign bank access to China and the declining US savings rate to explain the widening US trade deficit. Yi also said the Bank has not intervened in the RMB for a long time. We disagree, the PBoC has been selling USDs, but not in size.”