End of Reflation? Chinese Monthly PPI Increase Halves

One stat I had been watching is the monthly change in Chinese PPI. It pointed to accelerating inflation, hitting 1.6 percent in December. In January it fell in half, down to 0.8 percent. It's still the third highest number in the past four months, but if it harbingers disinflation, the global reflation trade could be hitting the skids amid monetary tightening in China.

There's not much to see in the CPI. Porkflation is still an issue, but there's no sign of the PPI inflation spreading into consumer prices. Although the CPI jumped 1.0 percent in January, there's a jump every year before the Spring Festival.

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