Weekly Market Recap
Asia Pacific
19/10/2020
Week in review
Week ahead
- 19/10 – CN – GDP, industrial output
- 23/10 – EU – PMI
- 23/10 – UK – PMI
- 23/10 – U.S. – PMI
Thought of the week
China’s consumer price index (CPI) slowed to 1.7% growth year-over-year in September, largely due to easing food prices from a rising food supply. Excluding food and energy, core inflation remained stable at 0.5% year-over-year, suggesting a slow recovery in demand. On the industrial end, China’s producer price index (PPI) also fell for the eighth consecutive month (-2.1% year-over-year) on the back of easing energy prices. Despite being ‘first in, first out’ of the pandemic, the easing inflation data point to the challenges still faced by China in driving a sustained economy recovery. The People’s Bank of China (PBoC) has increasingly emphasized the importance of targeted loans focused on small and medium-size enterprises, and medium-and-long term loans to the manufacturing sector. These challenges should prompt the PBoC to keep monetary conditions accommodative in the coming months, especially for these businesses, even as credit growth in September exceeded expectations.
China CPI and PPI inflation
Source: National Bureau of Statistics China, J.P. Morgan Asset Management
Data reflect most recently available as of 15/10/2020.
All returns in local currency unless stated otherwise
Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.
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