China's PPI fell for the 34th month in a row
Chinese Consumer Prices rose by 0.8% YoY. Analysts were forecasting 1.1% increase. This is lowest inflation since November 2009. Food prices rose at the slowest pace in years while the cost of alcohol & tobacco fell again. Falling food and tumbling oil and metals prices are pushing inflation lower, raising real interest rates and suggesting more stimulus is needed.
Chinese Producer Prices fell for the 34th month in a row, this month declining by 4.3%, missing expectations on 3.7% decrease. This is the biggest drop in prices since October 2009 and was led by a 9.9% plunge in fuel costs. To avoid a tightening of credit conditions, the PBOC will likely cut benchmark rates by 25 basis points as early as this month.
Despite the figures, Aussie was pushed higher and is currently being traded around 0.7820 area. Pair is likely to find support around 0.7750 and resistance above 0.7880 level. Later today, in the US session, JOLTS Job Openings figures are scheduled for a release.
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