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Analysts at TD Securities note that the China’s  CPI inflation increased to 2.7% y/y in May, driven largely by a 7.7 y/y increase in food prices.

Key Quotes

“Excluding food CPI hit its lowest since Sep 16. Although pork prices have been in focus due to the impact of African Swine Disease, pork prices actually fell on the month, but are still up 18.2% y/y.”

“We expect another 2.7% y/y increase in CPI in June, driven largely by the same factors, but with a likely rebound in hog price over the month.”