Group 1: CPI Analysis - In June, the CPI decreased by 0.1% month-on-month but increased by 0.1% year-on-year, marking a turnaround from the previous month’s decline of 0.1%[3] - The core CPI for the first half of the year rose by 0.5% month-on-month, indicating a reduction in downward price pressure[6] - The year-on-year CPI in June ended a four-month streak of negative growth, primarily due to a significant narrowing of the fresh vegetable price decline from -8.3% to -0.4%[22] Group 2: PPI Trends - The PPI fell by 0.4% month-on-month in June, continuing its negative growth trend, with a cumulative decline of 1.9% for the first half of the year[32] - Year-on-year, the PPI decreased by 3.6%, with the decline accelerating by 0.3 percentage points compared to May[36] - Contributing factors to the PPI decline include seasonal factors and weak external demand, particularly affecting industries like steel and cement[32] Group 3: Economic Outlook - The GDP deflator index is expected to further decline to around -1.4% in Q3, with a potential recovery to -0.9% in Q4 as PPI declines narrow and CPI rebounds[4] - The overall economic stability is contingent on policy support, with the need for stimulus measures to boost internal demand still evident[4] - Risks include potential policy shortcomings and disturbances in overseas markets, which could impact economic recovery[5]

Group 1: Economic Overview - Investment remains a drag on the US economy, with the Atlanta Fed's GDPNOW model predicting a 2.6% annualized growth rate for Q2, entirely driven by a reduction in imports [2] - Employment market shows resilience, with weekly initial jobless claims decreasing by 6,000 to 227,000, remaining at seasonal lows [2] - Fiscal policy remains expansionary, with a weekly fiscal deficit of $131.1 billion, higher than seasonal levels and stronger than historical averages [2] Group 2: US Market Performance - US stock market experienced a slight increase of 0.02%, driven by mixed signals from Federal Reserve officials regarding interest rate outlook and differing expectations on tariffs' impact on inflation [3] - The outlook for US stocks suggests a potential return to a bullish trend, supported by corporate earnings resilience, although high valuations and increased tariffs may limit upward potential [3] Group 3: Bond Market Insights - Short-term focus on liquidity tightening pressure following the increase of the debt ceiling, with a maintained view of high volatility in US bond yields [3] - Strategy suggests maintaining a high allocation to short- to medium-term US bonds, with attention to potential opportunities if yields rise [3] Group 4: Currency Analysis - The US dollar is experiencing short-term support due to delayed tariffs and economic resilience, but medium-term trends remain weak due to uncertainties in tariff policies and fiscal pressures [3] - The Chinese yuan is expected to maintain a neutral trend, influenced by mixed factors including tariff impacts and ongoing interest rate differentials with the US [3] Group 5: Gold Market Dynamics - Short-term gold prices may remain volatile due to geopolitical issues and cooling interest rate expectations, but medium-term support is expected from central bank gold purchases [4] Group 6: Chinese Economic Trends - Anticipated Q2 economic growth of approximately 5.2%, with nominal GDP growth around 4% and a GDP deflator potentially declining to -1.2% [6] - Retail price competition continues, with significant growth in instant retail orders and a notable increase in passenger vehicle sales, despite challenges in the automotive sector [6] Group 7: External Demand and Pricing Pressure - Global manufacturing PMI rose to 49.5%, indicating ongoing recovery in global manufacturing and demand [7] - Chinese exports to the US are cooling, while exports to non-US regions remain strong, although pricing pressures are evident across various sectors [7] Group 8: Policy Developments - Recent government policies aim to stabilize employment and support businesses, including increased unemployment insurance and social security subsidies [7] Group 9: Domestic Market Strategy - Domestic market sentiment is improving, with a focus on "anti-involution" policies and urban renewal expectations, leading to a stronger stock market performance [9] - Bond market shows weakness, with a rise in 10-year government bond yields to 1.66%, influenced by risk appetite and tightening liquidity [9] Group 10: Stock Market Outlook - A-shares are experiencing upward movement driven by various factors, including easing US-China trade tensions and urban renewal policies, although the market remains vulnerable to corrections [10] - The Hong Kong stock market is facing risks of volatility, with current valuations at high levels and requiring further catalysts for upward movement [10]

CPI Outlook for the Second Half of the Year - The core CPI has been rising since the beginning of the year, with June's core CPI at 0.7%, the highest since May 2024, driven mainly by core goods rather than services [2] - Service retail growth has slowed, with a year-on-year increase of 5.2% from January to May 2025, significantly lower than the 20% and 6.2% growth rates in 2023 and 2024 respectively [2] - The core goods CPI is expected to remain resilient in Q3, supported by the "old-for-new" policy, while facing high base pressure in Q4 [5][6] Service Prices - Service prices have shown a downward trend since 2020, with a year-on-year increase of only 0.4% expected in 2025 [8] - Tourism prices have weakened significantly, with a monthly average growth rate of -0.4% from January to June 2025, indicating a bottleneck in domestic cultural and tourism consumption recovery [9] Food Prices - Food items account for about 18% of the CPI, with pork prices being particularly volatile due to the pig cycle [13] - Pork prices are expected to remain low in Q3, with a potential slight recovery in Q4 as seasonal demand increases [14] Oil Prices - Oil-related products account for approximately 3.5% of the CPI, with Brent crude oil prices averaging $71.9 per barrel in the first half of the year, down 14.7% year-on-year [18] - Oil prices are expected to face downward pressure in the second half due to weak demand and ongoing supply pressures [19] PPI Outlook for the Second Half of the Year - The PPI has been in negative territory for 33 consecutive months, with significant price pressures across various industries [20] - Real estate investment and traditional infrastructure growth are dragging down building materials prices, contributing to a 0.9 percentage point decline in PPI [21] - The "anti-involution" policy is expected to impact prices in certain industries, potentially providing some support to related commodity prices [29] Overall Economic Indicators - The forecast for PPI in the second half of the year is a slight recovery to around -2.3%, with Q3 PPI growth expected at -2.5% [30] - The GDP growth target for the second half of the year is set at 4.6%-4.7% to achieve an annual growth rate of 5.3%-5.4% [30]

Economic Indicators - As of June 2025, PPI has experienced 33 consecutive months of year-on-year negative growth, while CPI has remained below 1% for 28 months[3] - The GDP deflator index has shown negative growth for 8 consecutive quarters, with an estimated -1% for Q2 2025[3] - For Q3 and Q4 2025, CPI is projected to grow at -0.1% and 0%, while PPI is expected to decline by -2.5% and -2.1% respectively[3] GDP Growth Projections - The actual GDP growth rate for the first half of 2025 is likely to be around 5.3-5.4%, requiring a second-half growth of 4.6-4.7% to meet the annual target[3] - The nominal GDP growth rate needs to stabilize above 4% for the year[3] CPI Insights - Core CPI has shown an upward trend, reaching 0.7% year-on-year in June 2025, the highest since May 2024[5] - Service retail sales growth from January to May 2025 was 5.2%, significantly lower than the 20% and 6.2% growth rates in 2023 and 2024 respectively[5] - The contribution of service CPI to overall CPI growth was only 0.17 percentage points, much lower than the previous year's 0.9%[5] Food and Energy Price Trends - Food prices, particularly pork, are expected to face high base pressure in Q3, with a projected negative growth in pork prices due to supply chain factors[24][26] - Oil prices are anticipated to decline further, with Brent crude averaging around $66 per barrel in the second half of 2025, leading to a significant drag on CPI growth[35][36] Risks and Uncertainties - Global economic recovery may fall short of expectations, impacting domestic price levels and potentially leading to further declines in export and commodity prices[4] - The effectiveness of industrial policy adjustments and "anti-involution" measures remains uncertain, which could prolong price pressures in certain sectors[4]

Group 1: Inflation Data Overview - In June, the CPI increased by 0.1% year-on-year, while the PPI decreased by 3.6% year-on-year, exceeding expectations of a 3.2% decline[4] - The nominal GDP growth rate for Q2 is estimated at 4.4%, slightly down from 4.6% in Q1[5] - The GDP deflator index is projected to be around -0.9% for Q2, compared to -0.8% in Q1[5] Group 2: CPI and PPI Analysis - The core CPI rose by 0.7% year-on-year, up from 0.6% in the previous month[6] - The PPI's year-on-year decline widened from 3.3% to 3.6%, with production materials dropping by 4.4% year-on-year[35] - The PPI's month-on-month decline was 0.4%, consistent with the previous month[35] Group 3: Inventory and Price Dynamics - Actual inventory growth has increased from 5.7% at the end of last year to 7.0% in May, indicating potential price pressures[12] - The actual inventory growth in the mining and upstream manufacturing sectors has decreased significantly, impacting PPI positively when it approaches zero[13] - Among 39 comparable industries, 23 have higher inventory levels than last year, but only 8 exceed levels from the first half of 2015[17]

Core Viewpoint - The article discusses the inflation data for June, highlighting the changes in CPI and PPI, and their implications for the economy, particularly in terms of GDP growth and price pressures across various sectors [3][14][25]. Group 1: June Price Data Summary - In June, the CPI increased by 0.1% year-on-year, while the core CPI rose by 0.7%, indicating a slight improvement in inflation after four months of negative values [3][18]. - The PPI decreased by 3.6% year-on-year, which is a larger decline than the previous month's 3.3%, reflecting ongoing pressures in the manufacturing sector [3][25]. - The nominal GDP growth rate for the second quarter is estimated to be around 4.4%, slightly down from 4.6% in the first quarter [3][16]. Group 2: CPI Analysis - The CPI's year-on-year increase was driven by a narrowing decline in food and energy prices, with food prices improving from -0.4% to -0.3% and energy prices from -6.1% to -5.1% [18][19]. - The rental market saw a seasonal increase in demand, with rents rising by 0.1%, which is lower than the average increase of 0.25% during the same period from 2015 to 2019 [4][19]. - Medical service prices have risen for three consecutive months, indicating potential ongoing inflationary pressures in healthcare [4][27]. Group 3: PPI Analysis - The PPI's month-on-month decline of 0.4% was influenced by seasonal price decreases in domestic raw materials and increased green energy supply, which reduced energy prices [5][26]. - Specific sectors such as coal and electricity production experienced significant price drops, contributing to the overall PPI decline [5][26]. - The article notes that industries with high export ratios are facing price pressures due to a slowdown in global trade, impacting PPI negatively [5][27]. Group 4: Inventory Perspective on PPI - The actual inventory levels in various industries are crucial for understanding PPI trends, with high inventory levels typically exerting downward pressure on prices [6][9]. - As of May, the actual inventory growth rate in the mining and manufacturing sectors has decreased, which historically correlates with a potential upturn in PPI [6][9]. - The current inventory pressure is slightly higher than last year but significantly lower than in the first half of 2015, indicating a more favorable pricing environment for some sectors [7][12].

Group 1 - The final annualized quarter-on-quarter GDP deflator for the United States in Q1 is 3.8, which is higher than the expected 3.7 and the initial value of 3.7 [1]

Group 1 - The final value of Japan's real GDP deflator for the first quarter is 3.3%, matching both the forecast and the initial value [1]

Group 1 - The final value of Japan's first quarter GDP deflator year-on-year is 3.3%, matching the expectations and previous value of 3.3% [1]

Group 1 - The core point of the article indicates that the annualized quarter-on-quarter revision of the US GDP deflator for the first quarter is 3.7, which aligns with both the expectations and the initial value [1]