Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Take this number with a HUGE amount of salt, but China reported overnight that inflation is running at 3.6% in March versus 3.2% in February. However, both numbers are below the target of 4% and hence should not be a deterrent if the country wishes to “stoke” the economy in the coming months – which is what will matter to Wall Street.
- China’s inflation edged up in March as Beijing shifted from containing price rises to shoring up flagging growth in the world’s second-largest economy. Consumer prices rose 3.6 percent over a year earlier, up from February’s 3.2 percent but below the government’s 4 percent target for the year, data showed Monday.
- The increase was driven by a hike in state-set fuel prices and a 7.5 percent rise in politically sensitive food costs, up from the previous month’s 6.2 percent but well below last year’s double-digit rates.
- Beijing shifted focus from cooling prices to shoring up economic growth in December after inflation eased from a high of 6.5 percent in July.
- China’s economic data often are clouded by the Lunar New Year holiday, which falls in either January or February and prompts many companies to close for a week or more. Trade and price data can be thrown off as factories rush to fill orders before the closure and then go on a buying binge to restock raw materials following the break.
- The government has yet to announce major changes, but financial analysts say regulators are quietly easing access to credit. Analysts expect Beijing to lower interest rates or make more money available for lending by lowering the minimum level of reserves banks are required to hold
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