Chinese Inflation and Industrial Output to Underperform

Chinese Inflation Expected at 1.5%

China’s consumer price index (CPI) rose by 1.6 percent in September when compared to a year ago. The forecasts called for a change of 1.8 percent. The cooling inflation measure is another indicator that points to the slowdown of the Chinese economy. There was optimism back in September when the August data was released and touched 2.0 percent for the first time in almost a year. As global demand falls, China has looked inward to grow the economy. Lower consumption as evidence by the CPI index could force the hand of the People’s Bank of China (PBoC) to stimulate the economy yet again in the search for growth. The forecasts this time are focused on 1.5 percent inflation growth.

Industrial production in China fell to below 6 percent monthly growth last month with a reading of 5.7 percent. The Minister of Industry and Information Technology has gone on the record to say he expects the 2015 annual growth to be above 6 percent. That is not a very encouraging forecast, given that last year the industrial production showed 8.3 percent growth. Again sluggish demand abroad and at home has hurt output.

China events to watch this week:

Monday, November 9
8:30pm CNY CPI
Wednesday, November 11
12:30am CNY Industrial Production

*All times EST
For a complete list of scheduled events in the forex market visit the MarketPulse Economic Calendar

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza