China Consumer Price Index beats expectations, market awaits US CPI

The Consumer Price Index for China arrived at -0.2% vs -0.3% previous and the estimated -0.3% for the year.

key notes

• China CPI (YoY) Feb: -0.2% (est -0.4%, prev -0.3%).
• China Producer  Prices YoY for Feb came in at 1.7% vs the estimated 1.5% and previous 0.3%.
• China CPI (M/M) Feb: 0.6% (est 0.4%, prev 1.0%).

However, with the focus on the US bond market, today's US CPI will be of keener interest. That being said, AUD/USD has slipped around the data to print fresh session lows at 0.7695 as US yields start to clime. 

The 10-year is up some 0.8% at the time of writing in a higher inflationary environment. 

Description of 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.