China Producer Price Inflation Tumbles As Global Reflation Cycle Ends

It appears, thanks to the collapse in China's credit impulse, that China's commodity boom is over...

China’s factory inflation slowed for a fifth month while the consumer price index retreated from a four-year high.

Producer prices rose at their slowest YoY rate since October 2016... with Consumer Durables prices contracting YoY for the 4th straight month.

And Consumer Price inflation slowed notably to +2.1% YoY (versus expectations of a 2.6% gain), dropping 1.1% MoM, with Consumer goods and food seeing the biggest slowdown.

And as goes Coal, so goes China PPI...

Prices for commodities such as iron ore and coal fell on “global oversupply and government policy to stem overcapacity,” Katrina Ell, an economist at Moody’s Analytics in Sydney, wrote in a recent note.

“The government’s clampdown on financial risks is also slowing credit growth,” she said, which is a drag on investment and demand for industrial inputs.

As Bloomberg notes, moderating factory inflation may offer limited support to the world reflation cycle, amid rising trade tensions that may weigh on the broadest synchronized global growth in years.