When is China CPI/PPI data and how could they affect AUD/USD?

China CPI/PPI overview

Early on Tuesday around 01:30 GMT, the market sees November month headline inflation numbers from China, namely the Consumer Price Index (CPI) and the Producer Price Index (PPI).

China’s annualized CPI reading is expected to rise from 3.8% to 4.2% with PPI YoY likely recovering to -1.5% versus -1.6% earlier. On an MoM basis, CPI bears the forecast to flash a 0.1% gain against 0.9% previous rise.

TD Securities follow the market consensus of a soft CPI number while saying:

China CPI rose to 3.8% y/y in October, its highest reading this year, due predominantly to a 101.3% y/y increase in pork prices. In contrast, ex-food CPI matched its lowest since October 15, suggesting that underlying price pressures remain benign. While the impact of African Swine Disease is likely to continue to exert upward pressure on headline CPI, this is likely to fade in the months ahead. Even so, we estimate that CPI rose further in November, to 4.4% y/y.

Analysts at Westpac also have their own say about Chinese data:

Inflation has not been a barrier to monetary easing in China if needed, with CNY fragility the bigger concern. At 12:30 pm Syd/9:30 am local, Nov CPI is seen bouncing to 4.3%yr from 3.8%yr but this is due to a surge in food prices, especially pork. Non-food inflation was only 0.9%yr in Oct. Nov PPI is also due.

How could it affect the AUD/USD?

CPI and PPI numbers from Australia’s largest customer will undoubtedly affect the AUD/USD moves. However, the market’s positive reaction could be compressed amid the present cautious trade sentiment. Should Chinese data please Aussie buyers with upbeat readouts, AUD/USD could refresh month high of 0.6865 ahead of visiting 200-day Simple Moving Average (SMA) near 0.6915. Alternatively, disappointment might have an immediate negative impact that can drag the Aussie pair further down towards a 100-day SMA level of 0.6810 ahead of shifting bear’s focus on November low near 0.6755.

Key Notes

AUD/USD extends losses to 0.6825 ahead of key Aussie/China data

AUD/USD Forecast: China weighs on the Aussie

About China CPI

The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services. The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index. The purchase power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.

About China PPI

The Producer Price Index released by the National Bureau of Statistics of China is a measurement of the rate of inflation experienced by producers. It captures the average changes in prices received by Chinese domestic producers of commodities in all stages of processing (crude materials, intermediate materials, and finished goods). Changes in the PPI are widely considered as an indicator of commodity inflation. If the Producer Price Index increase is excessive, it would indicate that inflation has become a destabilizing factor in the economy, The People’s Bank of China would tighten monetary policy and fiscal policy risk. Generally speaking, a high reading is seen as positive (or bullish) for the CNY, whereas a low reading is seen as negative (or bearish) for the CNY.