China: Core inflation lacks upward momentum - ANZ

Analysts at ANZ note that higher food prices boosted both CPI and PPI in May for Chinese economy, implying the current jump in inflation is a seasonal or temporary phenomenon.

Key Quotes

“Things to note are the decline in non-food CPI and PPI, which are more accurate indicators of inflation than the headline CPI figure.”

“Today’s inflation numbers is unlikely to impact China’s monetary policy stance. But the authorities will maintain a counter-cyclical stance on both the fiscal and monetary fronts amid growth risks from the trade conflict with the US.”