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June’s Chinese CPI has been released in line with market expectations of 2.7% year on year (Y/Y).

The data arrived as follows

  • June CPI Y/Y arrives at 2.7%, in line with the expected 2.7% and 2.7% prior.
  • June CPI M/M   -0.1% vs -0.1% expected and 0.0% prior.

This data follows when the Chinese  Consumer Price Index  inflation increased to 2.7% y/y in May, “driven largely by a 7.7 y/y increase in food prices. 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,” analysts at TD Securities explained.

About The Consumer Price Index

Chinese  Consumer Price Index  inflation is released by the  National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index. The purchase power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting  The People’s Bank of China  to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY and AUD, while a low reading is seen as negative (or Bearish) for the CNY and AUD.