Event:
The National Bureau of statistics released the price data of January on February 16. Consumer prices (CPI) rose 0.9% year-on-year, and producer prices (PPI) rose 9.1% year-on-year, both weaker than the consensus expectation of the market. The low CPI may indicate that the short-term demand is still weak, while the narrowing of the ppi-cpi scissors gap is conducive to easing the operating pressure of enterprises in the middle and downstream industries, including small and medium-sized and private enterprises. We expect CPI to pick up moderately in the future, but PPI will continue to fall year-on-year.
Key investment points:
The decline of PPI exceeded that of CPI, and the scissors difference narrowed
In January 2022, the consumer price (0.9%, 1.5% of the previous value, CPI increased month on month) increased by 0.4% year-on-year; The ex factory price (PPI) of industrial producers increased by 9.1% year-on-year, the former value was 10.3%, and the month on month decrease was 0.2%. The decline of PPI is greater than Bloomberg's expectation. At the same time, the decline of PPI is also greater than that of CPI, which narrows the gap between PPI and CPI. At present, although the scissors difference between the two is still at a high level, it is close to falling back to the level of two standard deviations. The decline in the scissors gap is conducive to the rescue of private enterprises.
CPI fell due to the decline of food prices, and the prices of PPI bulk commodity industry mostly fell
The CPI breakdown is mainly reflected in the decline in food prices. Among the itemized month on month growth, food prices increased by 1.4% from a decrease of 0.6% in the previous month; In the year-on-year growth, food prices fell by 3.8%, an increase of 2.6 percentage points over the previous month. In the PPI sub item, the prices of coal, oil, steel and other related industries fell. In the month on month growth of PPI, the price of means of production decreased by 0.2%; The price of means of subsistence was flat. Under the policy of ensuring supply and stabilizing price, the prices of coal and steel continued to fall. In the year-on-year growth of sub items, the price increase of coal mining and washing industry, oil and natural gas mining industry, petroleum, coal and other fuel processing industry, non-ferrous metal smelting and rolling processing industry, ferrous metal smelting and rolling processing industry fell.
PPI inflation expectations will continue to fall in the future, and the scissors gap will fall to around 2%
Affected by various factors such as coal supply guarantee, high base effect and possible improvement of overseas supply, the downward trend of PPI year-on-year will probably continue in the future. At present, China's economic growth pressure is still large, there will be no obvious pressure on the rise of CPI, and the expectation of inflation environment is still moderate. From the perspective of high-frequency data, with the increase of global epidemic adaptability and the gradual shift of epidemic response to deregulation, the bottleneck effect of the global supply chain is declining, the Baltic dry bulk index has dropped significantly, and the Baltic Sea shipping index has also entered the decline channel. The return speed of PPI may be faster than the mainstream expectation of the market.
Risk tips
The recovery of the epidemic was less than expected, and the geopolitical risk increased more than expected
