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.


Yen Cross Tue, 04/10/2018 - 22:14 Permalink

 I can't wait to see the PBoC try and devalue the yuan further.

 China exports inflation, NOT deflation.  {BTW}

  Overcapacity, has NOTHING to do with DEFLATION.

 Keep watching the Blow Horn.  Honk, Honk.

Oldwood lester1 Tue, 04/10/2018 - 22:53 Permalink

Exactly. China should feel very threatened. A trade war would hurt a lot of people but China would take it in the ass....and NOT in a good way.

Note that they are making threats and then suggesting softening their tariffs.

To have a strong military creates a disincentive for war (inspire of recent actions). A strong military is a THREAT, that if used properly helps create stability. 

Trump tariffs are a threat that can be used to move the deficits, and it is a FACT that every preceding "negotiations" has FAILED.

In reply to by lester1

Oldwood Yen Cross Tue, 04/10/2018 - 23:11 Permalink

I do not trade with my neighbors. If they fail to maintain their property, I sell (even at a loss) and move somewhere else. It is better to take the loss sooner than later.

We don't HAVE to trade with China. Globalists and those making their living from it will say we do, but we have watched as our country has declined for years while relatively few do quite well.

Undertakers profit bigly from war and disease.

In reply to by Yen Cross