China December CPI -0.3% y/y (expected -0.4%)

<p>Inflation data from China for December 2023</p><p>Very weak numbers, deflation y/y and barely positive m/m. </p><p>Monthly PPI -0.3%</p><ul><li>prior -0.3%</li></ul><p>China's consumer prices extended their decline for a third month. Factory gate prices (PPI) drive home the point of persistent deflationary pressures in China. The economy is recovering, but its patchy. </p><p>The point many make (including me) is that inflation is not an impediment to further easing from the People's Bank of China. Which is true but misses the fear over a weaker yuan:</p><ul><li><a href="https://www.forexlive.com/centralbank/why-the-peoples-bank-of-china-cant-ease-the-economic-headwinds-away-20240108/" target="_blank" rel="follow" data-article-link="true">Why the People's Bank of China can't ease the economic headwinds away</a></li></ul><p>In that post you'll note I said the PBOC may well be left with no choice but to ease though … and that's whats expected next week:</p><ul><li><a href="https://www.forexlive.com/centralbank/peoples-bank-of-china-rate-cut-coming-up-on-monday-preview-20240111/" target="_self">People's Bank of China rate cut coming up on Monday? Preview.</a></li></ul>

This article was written by Eamonn Sheridan at www.forexlive.com.