Analysts at TD Securities note that China’s May CPI rose 2.7% y/y from 2.5% y/y in April, unchanged m/m, in line with expectations.
Key Quotes
“PPI rose 0.6% y/y, 0.2% m/m. Food inflation continues to accelerate due to supply pressure, up 7.7% y/y, led by pork prices, which rose 18.2% y/y, vegetable prices, up 13.3% y/y and fruit prices, which rose 26.7% y/y.”
“The worsening of African Swine Disease suggests more upside for food prices, but we don’t expect it to have any major policy implications, with China likely to maintain its path of targeted easing.”
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