China continues to show better progress - UOB

Analysts at UOB Group explained that China continues to show better progress on the reflation front, reporting a strong set of inflation numbers yesterday. 

Key Quotes:

"For the month of September, China PPI grew further to +6.9% YoY, from +6.3% YoY in August. Equally important, core CPI also rose to +2.3% YoY from +2.2% YoY. 

The strong set of inflation figures set the stage for the September activity indicators to be released on Thursday. These include, industrial production, retail sales, fixed asset investment and of course the Q3 GDP growth rate. Consensus forecast remains for a slight dip in 3Q GDP growth rate to 6.8% YoY from 6.9% YoY. However, PBoC Governor Zhou Xiaochuan was quoted by the media as saying that China’s economy is expected to grow by a 7.0% YoY in 2H. This would imply further strength in 3Q GDP."