Chinese inflation rose by 0.2% M/M in September, with the Y/Y-outcome flat compared to market expectations of a 0.2% Y/Y increase. Details showed consumer goods falling by 0.9% Y/Y while services inflation remained positive at 1.3% Y/Y. Food prices were the main drag, falling by 3.2% Y/Y. On a product level, household items (-0.4% Y/Y) and transport & communication (-1.3% Y/Y) showed falling price levels. The Chinese producer price index rose by 0.4% M/M, the most since April 2022. The Y/Y-reading turned less negative (-2.5% Y/Y from -3%) because of less-challenging base effects and higher oil prices.
The Chinese trade surplus rose from $68.2bn in August to $77.71bn in September. The underlying picture isn’t a rosy one though with imports dropping 6.2% Y/Y (from -7.3% Y/Y) and pointing to weak domestic demand. Exports declined by 6.2% as well (from -8.8% Y/Y) which serves as proof for sluggish global growth. The Chinese yuan continue to trade on the weak side against the USD (USD/CNY 7.30). Chinese stock markets join the global trend, falling by 1-2% this morning, despite rumours that the country is considering a state-backed stabilization fund to shore up confidence in the stock market.
Argentina’s central bank raised its policy rate by 15 percentage points to 133%. National CPI data showed another acceleration for September (+12.7% M/M & +138.3% Y/Y). Off the record, they also attempt to prop up the Argentina peso which trades in the shadow market as weak as USD/ARS 1040 (“dollar blue rate) compared to official rate of USD/ARS 350. The currency is under even more pressure than usual in the run-up to October 22 elections with front-runner candidate Milei encouraging Argentines to stop savings in pesos as he wants to replace the national currency with US dollars (dollarization).
