Nobody does it like China. Inflation exploded in October:
In October 2019 , the national consumer price rose by 3.8% year-on-year . Among them, the city rose 3.5% , the rural rose 4.6% ; the food price rose 15.5% , the non-food price rose 0.9% ; the consumer price rose 5.2% , and the service price rose 1.4% . 1 – 10 on average, the national consumer prices rose year on year by 2.6% .
In October , the national consumer price rose by 0.9% from the previous month . Among them, the city rose 0.8% , the rural rose 1.2% ; food prices rose 3.6% , non-food prices rose 0.2% ; consumer prices rose 1.4% , service prices were flat.
Check out pork and protein! The PBOC can look through this in terms of its reaction function but it’s nto going cut rates as it happens and, moreover, it is not going to cheer the Chinese consumer.
Meanwhile, the PPI is sinking:
In monthly terms it has actually levelled out recently. But I expect heavy losses in the ferrous complex ahead so we can go deeper yet.
None of it it yet a crisis but it is certainly going to weigh on wider activity that is already slowing as households are leeched of income to pay for basic foodstuffs