China’s industrial profits bouncing back after 3-year downtrend

China's industrial profits bouncing back after 3-year downtrend

China reflation momentum strengthens in April, likely keeping the PBOC on hold

The desk maintains a bullish outlook on the Chinese yuan, bolstered by stronger-than-expected inflation data from April. Per the full note from ing-think, both China's Consumer Price Index (CPI) and Producer Price Index (PPI) exceeded forecasts, with PPI reaching a notable 45-month high. This inflationary momentum suggests that the People's Bank of China (PBOC) is likely to remain on hold, avoiding any immediate policy shifts despite rising energy prices, which could have delayed effects on the economy. The consensus among firms indicates a target range for USD/CNY that reflects this cautious optimism, with no high-impact events on the calendar to disrupt this trajectory.

Italian industrial production increased again in March

Italian industrial production rose again in March, suggesting the manufacturing sector is showing signs of recovery after a prolonged downturn.

Stronger growth and reflation ease pressure for stimulus in China

The desk views the current economic landscape in China as a stabilizing factor amidst global uncertainties, particularly the ongoing conflict in Iran. Per the full note from ing-think, stronger-than-expected growth and inflation are reducing the immediate need for additional stimulus measures from Chinese policymakers. This outlook is supported by recent data indicating that China's GDP growth has outpaced forecasts, with a notable uptick in industrial output and consumer spending. As a result, the desk anticipates that the Chinese yuan will maintain its strength against major currencies, particularly if inflationary pressures continue to build.