After declining 0.3% and 0.2% in January and February, China’s CPI inflation rebounded to +0.4% y/y in March, above market expectation of 0.3%, primarily on higher commodity prices. Pork prices, a key element in China’s CPI basket, fell 18.4% y/y after plunging 14.9% in February.
This is the first CPI increase this year.
Although CPI has yet to reach a level that will significantly impact the currency, reckon it’s still good news for yuan bulls. As inflation pressure starts to emerge, the People's Bank of China would be more tolerant of any CNY appreciation and higher interest rates.
Of course, the China CPI "Blue Print " could also raise Global inflation concerns and might add a ripple or two of angst to the inflation pacifist calm that has fallen on the market post-FOMC minutes.
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China CPI Rebounds
Published 04/09/2021, 02:25 AM
Updated 07/09/2023, 06:31 AM
China CPI Rebounds
China CPI Rebound And May Eventually Be Good News For Yuan Bulls
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