China: Inflation figures and the December trade surplus awaited - BBH

Research Team at BBH suggests that China is expected to report inflation figures and the December trade surplus.  

Key Quotes

“China's CPI has gradually firmed.  The 24-month average in November was 1.7%, while the 12-month average 2.0% and the three-month average may tick up to 2.2% in December.  It is the PPI that is surging.  Recall it was negative (deflationary) for five years through late Q3 16.  After turning positive in September (0.1%) it jumped to 1.2% in October and 3.3% in November.  It is expected to rise toward 4.6% in December.    Often when producer prices rise faster than consumer prices, investors get concerned about profit margins.  Some economists also talk about pipeline inflation, but this seems to be more an exception than the rule.” 

“China's trade surplus is expected to edge toward $47.5 bln from $44.6 bln in November.  Exports likely deteriorated after edging 0.1% higher year-over-year in November.  The improvement likely stems from a slowing in imports.  China's monthly trade surplus is fairly stable.  The three, 12, and 24-month averages converge between $44.3 and $46.5 bln.   Separately China may also report that credit expansion slow, but remains elevated.  Consider that this year's monthly average of aggregate social financing is CNY1.46 trillion compared with CNY1.27 in 2015.”