China inflation rises as coronavirus spreads

February 10, 2020

HONG KONG - China's CPI overshot market expectations in January, partially due to the coronavirus outbreak. The 1.4% m/m spike is higher than seasonal increases seen over the past three years.

ANZ Bank says that while the headline PPI figure returned to positive territory in January, continued uncertainty from the virus outbreak and subsequent deflationary risks facing Chinese factories will be concerning. 

ANZ says the probability of another cut in the 7-day reverse repo is low because the People's Bank of China will place emphasis on financial stability and efforts to contain the virus via liquidity injections and re-lending. (ATI).