Events
On January 12, the National Bureau of statistics released China's consumer price (CPI) and producer price (PPI) data in December last year. In December last year, CPI rose by 1.50% year-on-year, with a year-on-year growth rate of 0.80 percentage points lower than that of the previous month and a month on month decrease of 0.30%; In December last year, PPI increased by 10.30% year-on-year, and the year-on-year growth rate decreased by 2.60 percentage points compared with the previous month, with a month on month decrease of 1.20%.
Comments
CPI food items fell again. The decline in pork prices is also the main factor in the year-on-year decline in CPI this month. Looking forward to the whole year of 2022, in the short term, the pork price is still expected to rise slightly driven by the demand of the Spring Festival. However, from the change of the stock of fertile sows, the pork supply will still be not weak in the first quarter. There may be a double bottom in the pork price in the first half of the year, and the pork price will gradually rise in the second half of the year under the conduction of the peak decline of the stock of fertile sows.
Affected by the disturbance of China's epidemic situation and the decline of international oil prices, the year-on-year growth rate of non food prices fell slightly. Affected by the epidemic spread in many places at the end of the year, the upward driving force of service prices weakened. Considering that winter is a period of high epidemic incidence, and epidemic prevention becomes more difficult, the imported cases have begun to appear in Omicron, and the service consumption may continue to be restrained in the short term.
In terms of PPI, the policy of ensuring supply and stabilizing price has achieved initial results, and the rising trend of energy and raw material prices has been further curbed. On the whole, the policy of ensuring supply and price stability in the coal and metal industry has been further strengthened, and the supply side continues to improve. Looking forward to the future, the supply of upstream raw materials may continue to improve
PPI fell. Under the policy guidance of "ensuring supply and stabilizing price" and the balance of energy supply and demand, the prices of raw materials and energy are expected to further return to rationality.
Under the constraints of the peaking decline in raw material prices and pig prices, China's inflationary pressure will be further reduced. According to our judgment in the two "dark lines" of the Fed's interest rate hike, the Fed's current round of interest rate hike is "sooner rather than later". In this situation, the further compression of the central bank's easing policy window and the weakening of China's inflation will further increase the central bank's easing space in the short term.
Risk warning: oil price fluctuation risk; Covid-19 outbreak exceeded expectations.
