Event: in March 2022, the CPI was 1.5% year-on-year, the previous value was 0.9%, and the market expectation was 1.3%; CPI was 0.0% month on month, with the previous value of 0.6%; Core CPI was 1.1% year-on-year, and the former value was 1.1%; PPI was 8.3% year-on-year, the previous value was 8.8%, and the market expectation was 8.1%; PPI was 1.1% month on month, with the previous value of 0.5%.
Overall, CPI rose year-on-year in March, with an increase compared with the previous value. Food CPI decreased year-on-year, but the decline was narrower than the previous value. Non food CPI rose year-on-year, with an increase compared with the previous value. Core CPI was flat year-on-year. CPI, food CPI, non food CPI and core CPI fell seasonally, but CPI, food CPI and non food CPI were higher than the seasonal average, and the core CPI was roughly the same as the seasonal average.
Disturbance factors increased and prices rose more than expected. The price rise in March exceeded market expectations, mainly driven by the rise in international commodity prices. Among them, the prices of industrial consumer goods increased significantly, such as gasoline, diesel and liquefied petroleum gas. In addition, the spread of the epidemic has also led to the rise of some food prices. For example, the poor logistics has pushed up the prices of fresh vegetables and eggs.
The commodity price alarm was not removed, and PPI continued to rise month on month. In March, although the year-on-year increase of PPI continued to decline, it was mainly due to the high base in the same period last year, driven by tail raising factors, and the month on month growth of PPI was more than seasonal. The price of industrial products is greatly affected by the price of international bulk commodities. Geopolitical factors promote the continuous rise of international bulk commodity prices, driving the prices of Petrochina Company Limited(601857) and other related industries to continue to rise month on month. By industry, the coal mining and washing industry increased by 53.9%, with an increase of 8.5 percentage points; The oil and gas exploitation industry rose 47.4%, with an increase of 5.5 percentage points; The oil, coal and other fuel processing industry rose 32.8%, an increase of 2.6 percentage points.
In the future, international geopolitical factors are still the key variables affecting commodity prices. If supply continues to shrink, the weakening rate of PPI may slow down without a rapid decline in global demand. The further repair of CPI is uncertain. On the one hand, it is the spread of the epidemic and the disturbance of commodity prices, on the other hand, the inflection point of the pig cycle needs to be confirmed; The core CPI may continue to be weak under the suppression of the spread of the epidemic. As China’s price rise is mainly caused by the rise of international prices, and China’s overall price level is not high, especially the core CPI is not strong, inflation may not be the key factor affecting monetary policy at present.
Risk tips: the epidemic situation exceeded expectations and geopolitical risks exceeded expectations
