Forex - China PPI rebounded slightly on recovering commodity prices, while CPI went up on base effects


 01:41 (GMT) 11 Apr

  [Economic Data]

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China PPI rebounded slightly on recovering commodity prices, while CPI went up on base effects (0101-KHKQ-C01)

China inflation rebounded to 2.3% y/y on base effects. Inflation fell 0.4% m/m terms. This was due to changing base effects for food. Food inflation rose 4.1% y/y from 0.7% prior. Meanwhile inflation ex food and energy remains relatively stable at 1.8% y/y for the second consecutive month. Food and energy inflation is set to pose upside risk to inflation in the coming months.

Factory prices PPI rose 0.4% y/y from 0.1% prior. This signalled at a recovery in commodity prices and should alleviate fears of deflationary factory prices which can weigh on GDP growth.


Forex - China Flows: CNY steady, while CNH saw slight weakness


 02:38 (GMT) 08 Apr

 [Forex Flows]

USD/CNH saw a bid tone on Monday to 6.7204 last. Data released over the weekend saw foreign reserves rose to USD 3,099bn in March from USD 3,090bn a month ago, in line with our expectations. Kudlow says US-China deal is now closer, and more teleconferences ahead after talks ended on April 5. Pair remains within current range of 6.7050-6.7319. Pair's remains dependent on news updates to shift any movements.

PBoC fixed mid-point at 6.7201 vs. previous close of 6.7178. USD/CNY opened steadily and last seen in 6.7138. 1Y NDFs edged up slightly to 6.7578. For USD/CNY, watch for a bid tone in the coming days but suspect a firm support at the 6.7000 big figure.


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