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China CPI increased by 1.4% in November, less than expected

Wednesday, Dec 10 2014

The consumer price index in China rose 1.4% from the year-ago period, what is the lowest reading since November 2009 and below expected increase by 1.6%.  Month-on-month, prices fell 0.2%, missing forecasts on no change. Decline in inflation is mostly due to falls in global commodity prices which should, on balance, benefit most firms and households. What we can also expect is that  price pressures are to moderate further going into next year.

 

Separate report on PPI also missed market predictions on decline by 2.3%. The producer price index fell for the 33rd straight months, down 2.7% on year in November.  The wider fall in industrial commodity prices is likely to push year-on-year growth in producer prices even deeper into negative territory in the months ahead. However, falling PPI shouldn't be seen as a sign of distress in the industrial sector. 

 

After data was released, Aussie was initially pushed lower but found area around 0.8260 level to be supportive in order to rebound and currently be traded few points above 0.8320 level. Since there will be no major data releases later today we can expect that pair will found support around 0.8260 level and resistance above 0.837 area.

Last modified on Wednesday, 10 December 2014
More in this category: « Australian Home Loans rose by 0.3% French Industrial Production fell by 0.8% »

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