In this briefing:
1. Raw Materials and Retail Pricing
What the pricing data seems to imply is that consumer prices remain relatively steady but trending slightly downward, likely from weakness in household consumption that mirrors the broader economic trends. Corporate and producer sector data is driven by weakness in commodities and raw materials that seem hard pressed to accelerate in 2019 given the high base effect from 2018.
2. Trade During Lunar New Year
An underlying issue regarding February data is just how pressurized it is. Between cross armed speculations about trade talk negotiations and the biggest Chinese holiday, it should come as no surprises that February data is underwhelming. Chinese markets are still grappling with a way forward in the trade talk quagmire, but February numbers are in many ways seasonal, due to the holiday snapshot it encompasses.
3. Why China’s Stimulus Will Disappoint
By Lawrence Brainard, Chief Emerging Market Economist at TS Lombard
- In a Chinese version of QE the PBoC is flooding markets with liquidity
- Commercial banks will be slow to use it to boost lending to SMEs
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