For the 34th month in a row, Chinese Producer Prices (PPI) fell YoY (dropping 4.3%, missing expectations of a 3.8% deflation). This is the biggest YoY drop in prices since October 2009 led by a 9.9% plunge in fuel costs. Chinese Consumer Prices are also showing continued deceleration with a 0.8% rise YoY (missing expectations of a 1.0% rise YoY) - the weakest CPI low-flation since November 2009. Great news for the average Chinese person is that food prices rose at the slowest pace in years (and even better the cost of alcohol & tobacco fell YoY again).
Producer Price 'Deflation' continues for the 34th month...
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As Consumer Price 'Lowflation' slides...
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Of course, this will provide just enough "bad news is good news" headline fodder for the sell-side to once again demand the PBOC cut RRR again and save the world...
As Japan is now the only region in the world seeing rising forward inflation expectations...
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Charts: Bloomberg
