October CPI increased by 1.9% in the mean will not exceed 2%
Yesterday, the National Bureau of Statistics data show that in October CPI rose 1.9%, an increase of 0.3 percentage points increase over the previous month, but still remained below 9% for 9 consecutive months. Analysis, the CPI rose slightly in October, the main factors are lower food prices drag on the CPI, and fuel costs. The CPI may continue to rise slowly in the future. However, since the CPI remained at a low level of 1.5% in the first ten months, the annual CPI should remain below 2%. In terms of monetary policy, the pedestrian operation is still in the peak load, DR007 is still around 2.8%, the currency is hard to relax. However, some analysts believe that the market does not have to be overly pessimistic about liquidity. The reverse repurchase period of 63-day maturities is still increasing. This part will create a liquidity supply across the New Year and will substantially reduce the impact of commercial banks on liquidity during the year It is expected that the improvement in liquidity during the year should not be underestimated. Hong Kong Commercial Daily reporter Wu Jingbin
Food prices dragged down
Overall, CPI inflation in October slightly exceeded previous market expectations. Peking University School of Economics professor Cao Heping believes that because of the seasonal factors and holiday factors, food and tobacco prices up, resulting in price increases have expanded.
Specific data show that in October, food and tobacco prices rose 0.3%, affecting the CPI rose about 0.09 percentage points. In September, the price of food, tobacco and tobacco dropped 0.4% from a year earlier.
Zhu Qibing, a macroeconomic analyst at the Bank of China, believes that the drop in food prices on the CPI this month is one of the major factors in CPI recovery in the current month. October food prices fell 0.4% year on year, the previous decline of 1.4%, the Central compared to the same period, the impact on the CPI was -0.08%, the previous value of -0.27%. In addition, the prices of energy products such as diesel, petrol and liquefied petroleum gas increased by 3.4%, 3.2% and 2.3% respectively, bringing the total CPI up 0.08%. In November, the price of refined products was increased once and there are still two price adjustment windows in the month.
CPI remained stable during the year
Data show that from January to October on average, the national CPI rose 1.5% over the same period last year, at the beginning of the year to develop about 3% of the price control targets.
Cao peace believes that the current basic price stability, in a modest upward trend in the fourth quarter prices may rise slightly, but the full-year price increase is still expected to be within 2%, it can be said that the completion of the annual price target has no problem.
Lian Ping, chief economist at Bank of Communications, also believes that since the hikes in the fourth quarter will remain at a relatively low level, no sharp rise in prices will be observed in the fourth quarter. The year-on-year growth rate of CPI is expected to remain at around 1.5% YoY, Inflationary pressure moderate.
Zhu Qibing said that from the high-frequency data, the wholesale price index of agricultural products and vegetable basket price index in early November the following behavior. At this stage of the larger drag on the price of food pork, the current ratio of pig food is still at a high level, pig supply is still adequate. As a whole, inflation will remain stable during the year.
Liquidity difficult to relax
Prices continue to rise modestly, will there be any change in monetary policy? Jiang Chao, chief economist at Haitong Securities, said inflation is slightly more than expected and the currency is still neutral. PPI flat CPI rise, inflation slightly more than expected. Looking ahead, the PPI will continue to decline despite the weakening of the infrastructure in the demand side and the superimposition of base effects, although the winter limited production will have some support to the PPI. Downstream, PPI prices to CPI transmission rate is very limited, food trend is still weak, CPI slightly up but still mild range. Pedestrian operation is still peak load, DR007 is still around 2.8%, difficult to relax the currency.
However, according to Zhu Qibing, the market does not have to be overly pessimistic about liquidity. The impact of insufficient liquidity and expected volatility on the liquidity caused by the capital shortage this year is far greater than the increase of interest rates at the beginning of this year. Although this week the pedestrian banks reduced the number of open market operations However, the reverse repurchase of the 63-day deadline is still on the rise. This part will form a New Year’s liquidity supply and significantly ease the liquidity expectations of commercial banks during the year, which should not be underestimated during the year.