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PPI Inflation Beats Consensus While CPI Inflation Eases
October headline CPI inflation eased to 0.7% yoy (-0.2ppt mom), below Bloomberg consensus of 0.8% yoy, as food deflation deepened (-2.9% yoy, -1.2ppt mom). Core CPI inflation slowed to 0.8% yoy (-0.2ppt mom), below consensus of 0.9% yoy, with goods inflation (0.8% yoy, -0.2ppt mom) and services inflation (0.7% yoy, -0.1ppt mom) both easing.
PPI inflation accelerated to 5.7% yoy (+0.7ppt mom), above Bloomberg consensus of 5.3% yoy, led by mining and quarrying inflation (27.9% yoy, +2.5ppt mom) and raw materials inflation (11.6% yoy, +2.2ppt mom). Meanwhile, consumer goods PPI deflation held at -0.1% yoy (0.0ppt mom).
Overall, the data is mildly negative for markets, as the PPI inflation beat reflects upstream cost-push rather than stronger end-demand, with softer core CPI inflation and unchanged consumer goods PPI deflation pointing to stalling pass-through. Looking ahead, investors should watch whether downstream margins continue to absorb rising input costs.
Our View
October headline CPI inflation eased to 0.7% yoy (-0.2ppt mom), below Bloomberg consensus of 0.8% yoy. The softness was mainly led by food deflation, which deepened to -2.9% yoy (-1.2ppt mom) against a higher base. Food, tobacco and liquor deflation also deepened to -1.6% yoy (-0.7ppt mom). Among other categories, other products and services inflation slowed markedly to 1.8% yoy (-4.1ppt mom), also partly due to a higher base of 12.8% yoy in Oct 25, while medical-related articles inflation eased to 2.4% yoy (-0.3ppt mom). By contrast, transportation and communication inflation accelerated to 5.5% yoy (+1.2ppt mom) on continued fuel cost pass-through. Overall, four of the eight major categories eased, two rose and two were unchanged. Core CPI inflation slowed to 0.8% yoy (-0.2ppt mom), below Bloomberg consensus of 0.9% yoy, with goods inflation at 0.8% yoy (-0.2ppt mom) and services inflation at 0.7% yoy (-0.1ppt mom).
PPI inflation accelerated to 5.7% yoy in October (+0.7ppt mom), above Bloomberg consensus of 5.3% yoy. Producer goods PPI inflation rose to 7.4% yoy (+0.9ppt mom), led by mining and quarrying inflation at 27.9% yoy (+2.5ppt mom) and raw materials inflation at 11.6% yoy (+2.2ppt mom). Consumer goods PPI deflation held at -0.1% yoy (0.0ppt mom), with food PPI deflation narrowing to -1.6% yoy (+0.2ppt mom) offset by durable consumer goods PPI inflation easing to 1.4% yoy (-0.2ppt mom). As a result, the producer-consumer goods PPI spread widened to 7.5ppt (+0.9ppt mom). Meanwhile, Purchasing Price Index inflation rose to 7.9% yoy (+1.0ppt mom), with five of the nine categories improving mom. Among them, fuel and power inflation accelerated to 18.6% yoy (+5.0ppt mom) and chemical raw materials inflation rose to 16.8% yoy (+4.2ppt mom). By contrast, non-ferrous metal materials and wires inflation eased to 16.7% yoy (-3.3ppt mom).
Overall, the October data is mildly negative for markets. The PPI inflation beat reflects upstream cost-push rather than stronger end-demand, as softer core CPI inflation and unchanged consumer goods PPI deflation indicate limited downstream pass-through, intensifying margin pressure. Looking ahead, investors should monitor whether downstream producers regain pricing power.
PPI Inflation Beats Consensus While CPI Inflation Eases
October headline CPI inflation eased to 0.7% yoy (-0.2ppt mom), below Bloomberg consensus of 0.8% yoy, as food deflation deepened (-2.9% yoy, -1.2ppt mom). Core CPI inflation slowed to 0.8% yoy (-0.2ppt mom), below consensus of 0.9% yoy, with goods inflation (0.8% yoy, -0.2ppt mom) and services inflation (0.7% yoy, -0.1ppt mom) both easing.
PPI inflation accelerated to 5.7% yoy (+0.7ppt mom), above Bloomberg consensus of 5.3% yoy, led by mining and quarrying inflation (27.9% yoy, +2.5ppt mom) and raw materials inflation (11.6% yoy, +2.2ppt mom). Meanwhile, consumer goods PPI deflation held at -0.1% yoy (0.0ppt mom).
Overall, the data is mildly negative for markets, as the PPI inflation beat reflects upstream cost-push rather than stronger end-demand, with softer core CPI inflation and unchanged consumer goods PPI deflation pointing to stalling pass-through. Looking ahead, investors should watch whether downstream margins continue to absorb rising input costs.
Our View
October headline CPI inflation eased to 0.7% yoy (-0.2ppt mom), below Bloomberg consensus of 0.8% yoy. The softness was mainly led by food deflation, which deepened to -2.9% yoy (-1.2ppt mom) against a higher base. Food, tobacco and liquor deflation also deepened to -1.6% yoy (-0.7ppt mom). Among other categories, other products and services inflation slowed markedly to 1.8% yoy (-4.1ppt mom), also partly due to a higher base of 12.8% yoy in Oct 25, while medical-related articles inflation eased to 2.4% yoy (-0.3ppt mom). By contrast, transportation and communication inflation accelerated to 5.5% yoy (+1.2ppt mom) on continued fuel cost pass-through. Overall, four of the eight major categories eased, two rose and two were unchanged. Core CPI inflation slowed to 0.8% yoy (-0.2ppt mom), below Bloomberg consensus of 0.9% yoy, with goods inflation at 0.8% yoy (-0.2ppt mom) and services inflation at 0.7% yoy (-0.1ppt mom).
PPI inflation accelerated to 5.7% yoy in October (+0.7ppt mom), above Bloomberg consensus of 5.3% yoy. Producer goods PPI inflation rose to 7.4% yoy (+0.9ppt mom), led by mining and quarrying inflation at 27.9% yoy (+2.5ppt mom) and raw materials inflation at 11.6% yoy (+2.2ppt mom). Consumer goods PPI deflation held at -0.1% yoy (0.0ppt mom), with food PPI deflation narrowing to -1.6% yoy (+0.2ppt mom) offset by durable consumer goods PPI inflation easing to 1.4% yoy (-0.2ppt mom). As a result, the producer-consumer goods PPI spread widened to 7.5ppt (+0.9ppt mom). Meanwhile, Purchasing Price Index inflation rose to 7.9% yoy (+1.0ppt mom), with five of the nine categories improving mom. Among them, fuel and power inflation accelerated to 18.6% yoy (+5.0ppt mom) and chemical raw materials inflation rose to 16.8% yoy (+4.2ppt mom). By contrast, non-ferrous metal materials and wires inflation eased to 16.7% yoy (-3.3ppt mom).
Overall, the October data is mildly negative for markets. The PPI inflation beat reflects upstream cost-push rather than stronger end-demand, as softer core CPI inflation and unchanged consumer goods PPI deflation indicate limited downstream pass-through, intensifying margin pressure. Looking ahead, investors should monitor whether downstream producers regain pricing power.
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