China's November Consumer Price Index weaker at -0.5%, first decline since Oct 2009

The November Consumer Price Index is out, with markets expecting it to print precariously close to negative territory (market f/c: 0.0%year), largely a result of sluggish food-price inflation.

The data arrived as follows:

• China November CPI -0.5 pct from a year ago (Reuters poll 0.0 pct).
• China November CPI-0.6 pct from previous month (Reuters poll -0.2 pct).
• China says November food CPI-2.0 pct from a year ago; non-food cpi -0.1 pct.

AUD/USD, meanwhile, is flat on the day and hardly moved on the data at 0.7414. 

Description of CPI

The Consumer Price Index is released by the National Bureau of Statistics of China. It is a measure of retail price variations within a representative basket of goods and services.

The result is a comprehensive summary of the results extracted from the urban consumer price index and rural consumer price index.

The purchase power of the CNY is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends.

A substantial consumer price index increase would indicate that inflation has become a destabilizing factor in the economy, potentially prompting The People’s Bank of China to tighten monetary policy and fiscal policy risk.

Generally speaking, a high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.