According to Jinshi.com, CITIC Securities Research said that the CPI in November fell to a new low this year, significantly lower than the market consensus. The overestimated pork peak season effect and the slope of domestic demand recovery, and the underestimated tourism "off-season is even slower" and commodity "low-price competition" may be the main reasons for the market's previous general overestimation of the fourth quarter CPI reading.
Since the beginning of this year, the core CPI has always been hovering in a relatively low operating range, which may mean that there is still a clear problem of insufficient domestic demand on the resident side. In November, the PPI turned negative again on a month-on-month basis, and the recovery process has been repeated. The sharp drop in international crude oil prices is the main reason.
It is expected that CPI will turn positive in February next year, and PPI may rise slightly due to the base effect, but will still fluctuate at a low level in the short term. The subsequent upward momentum of PPI will mainly depend on the progress of the implementation of the "three major projects".
