Inflation Data Summary - In September, China's CPI decreased by 0.3% year-on-year, slightly worse than the expected decrease of 0.2% and the previous value of -0.4%[2] - The month-on-month CPI increased by 0.1%, below the expected 0.2% and the previous value of 0%[2] - The PPI fell by 2.3% year-on-year, matching expectations but improving from the previous decline of 2.9%[2] - The month-on-month PPI remained at 0 for the second consecutive month, indicating a stabilization in prices[5] Core CPI and Price Trends - Core CPI rose to 1% year-on-year, marking the sixth consecutive month of increase and the highest level since February 2024[4] - Significant increases were observed in the living goods (+2.2%) and other goods (+9.9%) categories, driven by rising household appliance prices and gold products[4] - The food CPI continued to decline, with a year-on-year drop of 4.4%, the worst performance since January 2024, primarily due to falling pork prices (-17.0%) and fresh vegetable prices (-13.7%)[4] Market Implications - The data indicates a divergence in price trends, with core CPI improving while food prices remain weak, suggesting underlying demand issues[8] - The PPI showed signs of improvement mainly in upstream sectors, while downstream manufacturing prices remained weak, indicating a lack of robust terminal demand[5][8] - Future price indicators may maintain resilience due to upcoming policies aimed at addressing agricultural product issues[8]