China's Inflation Rate

[HenryTo]

CPI jumped 5.6% in July on a year-over-year basis, as food costs rose 15.4%. The median estimate was 4.6%.

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=axNWkDfsOmIA

[HenryTo]

CPI and PPI trending down. Look for more Chinese easing in the next several months.

http://blog.yardeni.com/2012/01/inflation-monetary-policy-in-china.html

[rffrydr]

The down blip is now a trend: 5.5, 3.40 copper, $1 cotton, $6 wheat... and suicides in Wangzhou. The question now is has property prices fallen off enough? Euro-crisis will tip the balance towards ease as 8% growth is still the "divine" number.
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Yardeni on Chinese inflation:

http://blog.yardeni.com/2011/10/china.html

[HenryTo]

One thing is for sure as Chinese inflation goes over 6%: Views on inflation for the rest of this year are highly divergent.

http://www.bloomberg.com/news/2011-07-09/china-inflation-surging-past-6-leaves-wen-with-delicate-balancing-act.html

[rffrydr]

New "hands off" policy on property and a aavorable print on CPI leaked into maket on Tues. leading some to speculate on EASE. That would be remarkable. What would the FDI reaction be to that?
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

100 basis points on Reserves.

[rffrydr]

Inflation fears show in implicit downgrade by Wen of committment to job growth:

[HenryTo]

Story on the last rate hike - which will come into effect December 21st. The People's Bank of China is continuing to take baby steps, when more is needed:

http://www.bloomberg.com/apps/news?pid=20601068&sid=aCxzUyBTtdo0&refer=economy

[rffrydr]

Gartman on last rate hike:

http://www.bloomberg.com/avp/avp.asxx?clip=mms://media2.bloomberg.com/cache/vIPwY9A8nLX0.asf
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

According to a Bloomberg article, the latest fuel hike (which is still not high enough for the refiners to break even) would increase the Chinese official inflation rate by about 0.5%.
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China fuel price hike only slows refiners' bleeding
Thu Nov 1, 2007 12:46 AM ET

By Judy Hua and Tom Miles

HONG KONG, Nov 1 (Reuters) - China's unexpected fuel price rises on Thursday were a tonic for loss-making refineries but it was not enough to put their operations back in profit, analysts said.

China raised the prices after fuel shortages spread across the country, forcing authorities to introduce rationing in the worst areas. Industry experts said refiners had undersupplied the market because low state prices had forced them to bear huge losses, while crude oil prices were approaching an all-time high.

For fuel suppliers, led by top Asian refiner Sinopec <0386.HK>, the price hike will slow the bleeding but -- if crude oil prices say high -- they will remain in the red.

"Refiners will only lose less," said Na Liu, a China commodities analyst at Scotia Capital.

"Without the hike, on average, Chinese refiners need crude to be below US$70 to break even on operating margin. With the hike, Chinese refiners need crude to be below US$80 to break even."

U.S. crude oil <CLc1> rose above $95 a barrel in late trading on Wednesday and traders have increased their bets that it will soon hit a record $100 per barrel.

Crude oil's rise has left Sinopec facing deeper and deeper losses from refining and some analysts had predicted it would receive a subsidy for the third year running to compensate it.

Others expected Beijing to force it to accept losses, although that could have compromised its aggressive expansion plans. Keeping fuel prices low also encourages people to smuggle cheap fuel out of the country or to sell on the black market at non-state prices.

China's National Development and Reform Commission said in an overnight announcement that it was boosting prices for gasoline and diesel by 9 and 10 percent, respectively, and was planning to revise China's "seriously low" natural gas price.

The price rise was the first increase in 17 months.

Sinopec's shares jumped 10 percent, while PetroChina <0857.HK>, Asia's top oil and gas producer and the country's second-largest refiner, surged more than 4 percent to all-time high of HK$20.25.

"Despite the price increase, we estimate domestic refining margins would still be below break-even in November. If crude oil prices stay around $90 per barrel, margins should be -$3 to -$5 per barrel in December," Goldman Sachs analyst Kelvin Koh wrote.

"Unless crude oil prices fall to the low $80s, the NDRC would likely need to increase prices by another 15 to 20 percent in early 2008 if it wants to bring margins to above break-even levels."

Citigroup analyst Graham Cunningham thought the market was currently not valuing Sinopec's refining division appropriately due to losses, and said Sinopec was the top pick in the China oil and gas sector.

"While the government took action earlier than expected, today's news reinforces our view that small independent refiners, which account for about 12 to 19 percent of China's gasoline and diesel production, limit Sinopec's refining downside potential," he wrote in a report.

For a story on the price hike, please click on [ID:nPEK184871].

Sinopec's Chief Financial Officer Dai Houliang said this week the company was under increasing pressure to secure supplies for the market as some independent service stations had stopped selling fuel.

[HenryTo]

Import prices from China jumped 1% during September. Following is courtesy of the WSJ:
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U.S. Trade Gap Narrowed in August,
But Import Prices Rose in September
By ELIZABETH PRICE and BRIAN BLACKSTONE
October 11, 2007 10:50 a.m.

WASHINGTON -- The U.S. trade gap narrowed more than expected in August, despite record prices for imported crude, amid strong exports and weaker U.S. demand for foreign-made goods.

Meanwhile, U.S. import prices increased sharply in September on higher oil and food prices but were broadly contained in other sectors, suggesting the weak dollar hasn't put too much pressure on the prices of overseas products.

The U.S. deficit in international trade of goods and services shrank 2.4% to $57.59 billion from July's revised $59.00 billion, the Commerce Department said Thursday. The July trade gap was originally reported as $59.25 billion.

The August trade gap was smaller than Wall Street expected. Economists surveyed by Dow Jones Newswires ahead of the report had predicted a $59.00 billion deficit. Demand abroad for American-made products has been an important contributor to U.S. economic activity this year and Thursday's report indicated that trend continued through the third quarter. Meanwhile, the weaker U.S. dollar is making imported goods less attractive for American consumers, suppressing imports.

In August, U.S. exports grew 0.4% to $138.34 billion, while imports fell 0.4% to $195.92 billion.

Foreign sales of industrial supplies like gold, cotton, and chemicals, up $927 million, led the export gains. Exports of foods, feeds and beverages were also stronger, up $606 million, as were exports of consumer goods like jewelry, boats, and sporting goods, up $186 million.

After a big jump in July, exports of big-ticket capital goods fell $216 million, mostly reflecting a decline in sales of civilian aircraft. Exports of autos and parts were also down $952 million in August.

Higher oil prices propped up the value of imports in August. The nation's bill for crude oil imports for the month was $21.73 billion, compared with $20.34 billion in July. The average price for a barrel of oil rose $2.53 to $68.09--the highest on record, the Commerce Department said. Import volume shot up to 319.20 million barrels for the month, compared with 310.32 million in July.

The U.S. paid $28.99 billion for all types of energy-related imports in August, up from $27.77 billion in July.

The U.S. also posted an increase, $330 million, in imports of capital goods like computers and semiconductors. These gains were more than offset by declines in imports of industrial supplies, down $689 million and imports of consumer goods, like furniture and apparel, down $201 million. U.S. demand for foreign-made autos and parts fell $378 million.

U.S. trade deficits with major trading partners generally narrowed in August, with record U.S. exports recorded to China, and many countries in Latin America, Commerce said.

The U.S. deficit with China was $22.53 billion, down from $23.80 billion in July. The deficit with Japan fell to $6.73 billion from $8.02 billion.

The trade gap with the euro area shrank to $8.16 billion from $10.39 billion. The deficit with Canada narrowed slightly to $5.31 billion from $5.69 billion. The U.S. gap with Mexico increased to $6.95 billion from $5.62 billion.

Import Prices Jump

Still, a fifth-straight rise in prices of goods from China suggests the U.S. can no longer count on cheap imports from that country to offset domestic inflationary pressures.

Import prices rose 1% in September after falling 0.3% in August, the Labor Department said Thursday, matching Wall Street expectations.

In the 12 months through September, import prices increased 5.2%, up sharply from August's 1.9% year-on-year rate and the highest since August 2006.

Petroleum import prices rose 5.4% last month compared to August, and were up 20.1% from September 2006. Petroleum prices have risen more than 40% since January. Natural gas prices fell 4.2% compared to August.

Excluding petroleum, import prices fell 0.2% in September and were up just 2% on the year. Excluding all fuels, import prices fell 0.1% last month, the first decline since February.

The government releases more closely watched U.S. consumer price data next week. So far, potential price-pressure spots like the lower dollar and higher energy prices haven't trickled down to U.S. core inflation excluding food and energy, which has softened considerably since the start of the year. That reduction in core inflation gave Federal Reserve officials the flexibility to cut rates last month in response to the housing recession and recent credit crunch.

Economists are split on whether the Fed will cut rates again when it meets later this month. In the minutes of last month's meeting released Tuesday, Fed officials cited the falling dollar as an inflation risk.

Prices for non-petroleum industrial supplies and materials imports fell 1.4% last month, according to Thursday's report, the largest decline since October 2006. Food prices, in contrast, spiked 1.2%, led by higher fruit prices. Autos advanced 0.2% on the month, as did imported consumer goods.

Capital goods import prices were unchanged.

Import prices rose 0.2% on the month for goods from the European Union. Prices rose 0.4% for goods from Canada and were up 2.8% for products from Mexico.

Prices of goods from China rose 0.2% in September, after rising 0.4% in August. Import prices from Japan were up 0.1%.

Overall U.S. export prices rose 0.3% last month. They grew 4.5% from a year ago.

Prices of agricultural exports were up 4.1%, while prices of non-agricultural exports were unchanged.

Jobless Claims Decline

The number of U.S. workers filing new claims for jobless benefits unexpectedly fell last week, indicating that the labor market started off the fourth quarter on a positive note.

Jobless claims decreased 12,000 to 308,000 on a seasonally-adjusted basis in the week ended Oct. 6, the Labor Department said Thursday. Claims for the Sept. 29 week were revised up to 320,000 from 317,000, however.

Wall Street forecasts had called for no change in the number of claims, according to a Dow Jones Newswires survey.

The four-week average -- which economists use to gauge underlying labor market trends -- also moved down 3,000 last week to 310,250.

The report follows Friday's monthly employment data indicating that the labor market is healthier than previously thought. September's nonfarm payroll additions were in line with expectations at 110,000, but the previous month was revised to an 89,000 gain from a 4,000 loss.

The initially reported drop in August was seen as a decisive factor in the Federal Reserve's decision last month to lower the fed funds rate by 50 basis points to 4.75%, so the payrolls revision has triggered a scaling back of market expectations for further easing. Futures markets are now pricing in only an additional 25-basis-point cut this year, whereas before a half-point reduction was given better-than-even odds.

In minutes released Tuesday from the Sept. 18 decision, the Fed acknowledged that employment "probably was not as weak" as the data had suggested, but said job growth was likely to continue to slow.

Also Tuesday, St. Louis Fed President William Poole said the September jobs report "does not suggest that the downside risk is occurring."

According to the Labor Department's weekly report Thursday, continuing claims for workers drawing unemployment benefits for more than a week fell 15,000 to 2,521,000 in the week ended Sept. 29, the latest week for which such data are available. That was the lowest level since June 16.

The four-week average for continuing claims declined 19,000 to 2,535,500, suggesting it is getting easier for workers to find new jobs.

The insured unemployment rate was 1.9% in the Sept. 29 week, unchanged from the previous week.

There were 23 states and territories reporting an increase in initial jobless claims for the Sept. 29 week, while 30 reported a decrease.

Florida reported the biggest drop, 2,756, thanks to fewer layoffs in several sectors, including construction, trade, services, manufacturing and agriculture. Michigan had the sharpest increase, 4,432, due to layoffs in the auto industry.

[rffrydr]

Listening to CNBC today they were quoting a "Study" that should US growth stop, slow to zero, China's rate would fall to 16% from 18%YOY.

That's Plan B in action.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Inflation now entering that special place....a state of mind:

http://www.ft.com/cms/s/0/e094f842-6b97-11dc-863b-0000779fd2ac.html

Which came first, the pig or the pig company? --A question, no doubt, left for the historians.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

...And, news of news, shanghai reacts.
_________________
Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Inflation in China higher-than-expected, once again:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aACdtl7pkDLw&refer=home