Chinese industrial output may be reaccelerating after a temporary slowdown. Adjusting for seasonal variation, the current and future new orders indices in the Market News International (MNI) business survey rose in September – see first chart.
The rebound has been accompanied by a pick-up in input cost and output price pressures. The MNI current and future prices received indices rose sharply this month, suggesting a reversal of the recent slowdown in producer price inflation – second chart.
The weekly food produce price index, meanwhile, continues to climb, signalling a likely further rise in CPI food inflation from an annual 7.5% in August – see previous post and third chart.
Markets have been partying in anticipation of "QE2". Will the Chinese authorities douse the celebrations?
