China opens sluice gate on deflation tsunami

Chinese inflation for May, wall-to-wall at the producer level:

2020 Nian months, the decline in the country’s industrial producer prices up 3.7% , a decline of 0.4% ; industrial producer purchase prices fell year on year by 5.0% , a decline of 1.2% – monthly average, industrial producer prices fell year on year by 1.7% , industrial producer purchase prices fell 2.2% 

Improved month on month at least but it’s everywhere:

CPI has been more sticky but is coming off fast now:

 In May 2020 , national consumer prices rose by 2.4% year-on-year . Among them, urban prices rose 2.3% , rural areas rose 3.0% ; food prices rose 10.6% , non-food prices rose 0.4% ; consumer goods prices rose 3.3% , and service prices rose 1.0% – monthly average, the national consumer prices rose year on year by 4.1%.

Even pork deflating now:

Demand destruction outpacing supply destruction.

David Llewellyn-Smith
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