China: PPI inflation rose mainly on a low base - Nomura

China’s producer price index (PPI) inflation rose to a slightly stronger-than-expected 4.7% y-o-y in June from 4.1% in May (Consensus and Nomura: 4.5%), above its average reading over January-May (3.7%) but weaker than in 2017 (6.3%), notes the research team at Nomura.

Key Quotes

“Similar to April and May, the rise of June PPI inflation was again driven by upstream sectors, partly due to a low base last year and higher oil price inflation in June.’

“On a month-on-month basis, PPI inflation edged down by 0.1pp to 0.3% in June.”