China: CPI and PPI came below expectations - TDS

Analysts at TD Securities note that China’s January CPI came in at +1.7%/y and was below the market estimate of +1.8%/y while PPI was also disappointing at +0.1%/y, compared to an estimated +0.3%/y.

Key Quotes

“With CPI and PPI coming in below expectations, the market’s focus is shifting towards the prospect of deflation returning.”

“Data so far has indicated that activity is slowing and with the risk of depressed corporate earnings, China’s demand for imports could fall.”