In Advance Of This Week's Most Important Economic Data

The week's most important economic data comes out in just over an hour, at 9 pm Eastern, when a battery of Chinese December datapoints are released, including the all important CPI (exp. 4.7%, 5.1% previous), GDP (9.5%, 9.6%), Industrial Production (13.3%, 13.3%), PPI (5.8%, 6.1%), and Retail sales (18.7%, 18.7%). Then again with Hu braving the barren wasteland of Chicago, it is extremely unlikely that China will continue with its symbolic slaps in the face of Bernanke's monetary policy. Or maybe it will, who knows. If inflation comes above the expected 4.7% level, then Hu will likely be forced at least bring up Bernanke's dirty laundry in public and put the blame where it deserves at least 50% to be. Luckly, we know that this most certainly will not happen. According to a central bank leak reported by Phoenix TV, CPI will come at 4.6%, while PPI will take the slack, coming just above consensus at 5.9%. Attached is detail of said leak, as well as the now traditional beatdown of Chinese economic data by Andy Xie.


China's inflation hit 4.6% in December, pushing the full-year 2010 consumer price index up 3.3%, while the national economy grew 10.3% last year, Hong Kong-based broadcaster Phoenix TV reported on its website Wednesday, without citing any sources.

The full-year inflation rate, though above the government's annual target of around 3%, was in line with broad market expectations.

China's November CPI rose 5.1%, which was a more than two-year high.

China's producer price index, a forward indicator for inflation, rose 5.9% last year, the report said.

The report cited unidentified central bank officials as saying the economic data had been leaked, but didn't directly attribute the detailed data to these officials.

While the accuracy of this leak is irrelevant, one thing is certain: the data will be completely fabricated, as the Chinese put even our own BLS to shame. To share his most recent thoughts on what he now openly calls a giant ponzi scheme, here is perpetual China basher Andy Xie who is absolutely correct on the direction of the trade, but, as most other "realists", absolutely wrong (so far) on the timing. Regardless, something tells us that no matter how hot or cold the Chinese economy comes out today, the AUD and its sister pairs are not going to like it...