Chinese Inflation Muted but Growth Trend is Sustained
China’s growth trend is sustained. Headline Consumer Price Index remained at +1.5% y/y in prior month. Monetary policy is expected to stay unchanged since the inflation is muted. PPI indicated that growth in industrial profits has weakened. The FX reserve has been growing for a decent period of time, gaining 3.056T dollars in the previous month. This came as a 9-month maximum. In the near- to medium- tern the yuan should improve versus the greenback. The National Bureau of Statistics showed that China's manufacturing PMI lifted +0.5 point to 51 in June, suggesting boost in the manufacturing. Output index rose +1 point to 54.4, the new orders index surged +0.8 point to 53.1 but the employed person index dropped -0.4 point to 49 and the supplier delivery time index fell -0.3 point to 49.9. The non-manufacturing PMI grew +0.4 points to 54.9. The services index increased +0.3 point to 53.8, the construction index lifted +1 point to 61.4. The new orders index was up +0.5 point to 51.4, the input price index gained +0.1 point to 51.2, the sales price index rose +0.5 point to 49.3, the employment index increased +0.6 point to 49.6 and the business activities expectation index bounced +0.9 point to 61.1. Caixin data was a bit different from this one.