Core Viewpoint - In July, the "anti-involution" policy led to a narrowing of the PPI month-on-month decline to -0.2%, while the CPI for industrial consumer goods improved, contributing to a third consecutive month of core CPI year-on-year recovery. However, the impact of supply-side capacity management on prices is more moderate compared to 2016, with PPI year-on-year decline remaining at a two-year low of -3.6% and CPI year-on-year turning flat [2][19]. Group 1: CPI Analysis - The CPI year-on-year remained flat at 0.0% in July, primarily dragged down by food items, while core CPI rose to 0.8% [4]. - Food prices decreased by 1.6% year-on-year, with the decline widening by 1.3 percentage points compared to the previous month, contributing a marginal drag of 0.30 percentage points to the overall CPI [8]. - Seasonal supply of fresh vegetables and fruits was abundant, leading to a significant year-on-year decline in their prices, with fresh vegetables down 7.6% and fresh fruits up 2.8% [8][11]. Group 2: PPI Analysis - The PPI month-on-month decline narrowed from -0.4% to -0.2% in July, but the year-on-year decline remained at -3.6%, indicating limited effectiveness of the "anti-involution" measures on price uplift [19]. - Key industries such as coal, steel, and cement have implemented capacity management measures, which have led to a reduction in the month-on-month price declines for these sectors [19]. - International factors continue to pressure export-related prices, while domestic oil and non-ferrous metal prices have seen increases due to external input factors [20]. Group 3: Market Outlook - The "anti-involution" measures have led to a faster increase in futures prices compared to spot prices, indicating market expectations are ahead of actual supply-side adjustments [24]. - Looking ahead, the diminishing drag from tailing factors may lead to improvements in PPI year-on-year in August and CPI year-on-year in the fourth quarter, but sustained inflation recovery will require stronger policy support and a focus on expanding domestic demand [24]. - The current supply-side price uplift is more challenging and softer compared to 2016, with a broader range of industries involved, including upstream raw materials and downstream sectors [24].

Core Insights - The expansion of domestic demand policies is showing positive effects, with the Consumer Price Index (CPI) rising by 0.4% month-on-month in July, reversing a 0.1% decline in June [1][2] - The Producer Price Index (PPI) decreased by 0.2% month-on-month in July, but the decline is narrowing compared to June, marking the first month of reduced decline since March [1][4] CPI Analysis - The month-on-month increase in CPI was primarily driven by rising prices in services and industrial consumer goods, with service prices up 0.6% and industrial consumer goods prices up 0.5% [2][3] - Key contributors to the service price increase included airfare (up 17.9%), tourism (up 9.1%), hotel accommodation (up 6.9%), and vehicle rental (up 4.4%) [2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, the highest since March 2024, indicating a continuous upward trend [2][5] PPI Analysis - The narrowing of the PPI decline is attributed to seasonal factors and uncertainties in the international trade environment, affecting prices in certain industries [4][6] - The construction sector faced demand slowdowns due to seasonal weather conditions, while the electricity sector saw reduced demand for coal due to increased hydropower generation [4] - The competitive market environment is improving, with significant reductions in price declines for coal, steel, photovoltaic, cement, and lithium battery industries [4][6] Industry Trends - The transformation and upgrading of traditional industries, along with the rapid growth of emerging industries, are contributing to a year-on-year price recovery in related sectors [5][6] - The implementation of consumption-boosting initiatives is driving healthy development in the consumer market, leading to price increases in sectors such as arts and crafts, sports equipment, and nutritional foods [6][7]

Group 1: CPI Analysis - In July, the CPI remained flat year-on-year, with a month-on-month increase of 0.4%, driven by rising service and industrial consumer goods prices [2][3] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024, reflecting effective demand expansion and improved market supply-demand dynamics [3][6] - Food prices saw a year-on-year decline of 1.6%, primarily due to a high base from the previous year, with fresh vegetable prices dropping by 7.6% [2][3] Group 2: PPI Analysis - The PPI decreased by 3.6% year-on-year in July, with the decline remaining consistent with June, although some industries showed signs of price recovery [4][5] - The month-on-month PPI fell by 0.2%, but this marked the first narrowing of the decline since March, indicating improved market competition and price stabilization in certain sectors [5][6] - Industries such as coal mining, black metal smelting, and photovoltaic manufacturing experienced reduced price declines compared to June, contributing to a less negative PPI [5] Group 3: Future Outlook - Experts anticipate that proactive macroeconomic policies will continue to support demand recovery, leading to a stabilization of domestic prices [6] - New policies aimed at boosting consumption, such as support for childbirth and early education, are expected to further stimulate domestic demand and contribute to a gradual recovery in CPI [6] - The ongoing "anti-involution" measures are projected to elevate industrial product prices in August compared to July, with a significant reduction in year-on-year price bases expected to aid in this recovery [6]

Group 1 - The consumer price index (CPI) increased by 0.4% month-on-month in July, reversing a previous decline of 0.1%, while year-on-year it remained flat [1] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024, with significant price increases in gold and platinum jewelry [2] - The producer price index (PPI) decreased by 0.2% month-on-month, but the decline was less than the previous month, indicating a potential stabilization in prices [2] Group 2 - The rise in CPI was primarily driven by increases in service and industrial consumer goods prices, with service prices up 0.6% month-on-month [1][2] - The implementation of consumption-boosting policies has led to a recovery in demand, contributing to the positive changes in prices across various sectors [3] - The recent PPI data suggests improvements in supply-demand relationships and reflects the effectiveness of macroeconomic policies aimed at optimizing industrial structures [3]

Group 1 - The consumer price index (CPI) increased by 0.4% month-on-month in July, reversing a previous decline of 0.1%, while year-on-year it remained flat [2] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024 [3] - The producer price index (PPI) decreased by 0.2% month-on-month, but the decline was narrower than the previous month, indicating a potential stabilization in prices [2][3] Group 2 - Service prices increased by 0.6% month-on-month, contributing significantly to the CPI rise, while industrial consumer goods prices, excluding energy, also saw a 0.2% increase [2] - The decline in food prices, down 1.6% year-on-year, was a major factor in keeping the year-on-year CPI unchanged [2] - The improvement in supply-demand relationships in certain industries is attributed to ongoing macroeconomic policies and consumer demand initiatives [4] Group 3 - Recent months have shown a stabilization in PPI declines, reflecting effective policy measures and structural adjustments in the industry [5] - The concept of "anti-involution" is expected to be a key focus for policies in the second half of the year, aiming to optimize resource allocation and improve industry efficiency [5] - The sustainability of price recovery remains uncertain and is contingent on effective policy execution and coordination [5]

Group 1: Consumer Price Index (CPI) Insights - In July, the Consumer Price Index (CPI) increased by 0.4% month-on-month, reversing a previous decline of 0.1% in June, while year-on-year it remained flat [1] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024, with significant price increases in gold and platinum jewelry at 37.1% and 27.3% respectively [2] - Service prices contributed to the CPI increase, rising by 0.6% month-on-month, accounting for over 60% of the total CPI increase [1][2] Group 2: Producer Price Index (PPI) Trends - The Producer Price Index (PPI) decreased by 0.2% month-on-month, but the decline was narrower by 0.2 percentage points compared to the previous month, indicating a potential stabilization in prices [1][2] - Year-on-year, the PPI fell by 3.6%, consistent with the previous month, reflecting ongoing challenges in certain industries due to seasonal factors and international trade uncertainties [1][2] - Specific sectors such as non-metallic mineral products, black metal smelting, and coal mining experienced price declines, influenced by seasonal weather conditions and reduced demand for electricity [2] Group 3: Economic Policy and Market Dynamics - The ongoing macroeconomic policies are showing positive effects, with improvements in supply-demand relationships across various industries, leading to price increases in some sectors [3] - The implementation of consumption-boosting policies is contributing to a healthier consumer market, with an increase in demand for upgraded consumer goods driving price rises [3] - The concept of "anti-involution" is expected to be a key focus for policies in the second half of the year, aiming to reshape supply-demand structures and enhance overall efficiency in industries facing overcapacity [3]

Core Viewpoint - The article discusses the July inflation data, highlighting the unexpected performance of PPI and CPI, and suggests that PPI may have reached its bottom with potential for recovery in the coming months [3][6][11]. Group 1: PPI Analysis - PPI in July decreased by 3.6% year-on-year, which was below market expectations, primarily due to the impact of "anti-involution" policies and a lag in response to high-frequency price increases [3][11]. - The decline in PPI was influenced by seasonal factors and international trade uncertainties, which affected prices in several industries, leading to a 0.24 percentage point drag on PPI [5][34]. - The article anticipates that the PPI year-on-year decline cycle, which began in October 2021, may have ended, with a potential second recovery phase starting next month due to favorable low base effects from last year [6][16][18]. Group 2: CPI Insights - CPI showed a year-on-year growth of 0% in July, aligning with the five-year average, while core CPI increased by 0.8% [4][22]. - Key contributors to CPI included a seasonal increase in housing rental demand, with rents rising by 0.1%, and improvements in durable goods prices, particularly in transportation and household appliances [4][25]. - The core service prices rose approximately 1.1%, driven by increased travel and medical service costs during the summer season [4][27]. Group 3: Economic Indicators - The economic cycle indicator, "the difference in growth rates between corporate and household deposits," has been rising for six consecutive months, suggesting improved consumer sentiment and economic recovery, which may positively influence PPI [7][17]. - The article notes that while PPI may not turn positive this year, the ongoing "anti-involution" policies are expected to gradually improve market conditions and pricing [8][19]. Group 4: Price Trends and Market Dynamics - The proportion of CPI items experiencing price increases rose seasonally, indicating a recovery in price dynamics [38]. - The proportion of industries with rising PPI prices slightly increased, reflecting a gradual improvement in market conditions [39][42]. - The article emphasizes that the ongoing optimization of domestic market competition is contributing to a narrowing of price declines in several sectors, including coal, steel, and solar energy [5][35].

Inflation Overview - July CPI remained flat year-on-year at 0.0%, better than the market expectation of -0.1% and consistent with prior predictions[1] - Month-on-month CPI increased by 0.4%, compared to a previous value of -0.1%, aligning with seasonal trends[1] - July PPI recorded a year-on-year decline of -3.6%, matching the previous value and falling short of the market expectation of -3.4%[1] CPI Components - Service prices rose by 0.6% month-on-month, contributing approximately 0.26 percentage points to the CPI increase[2] - Industrial consumer goods prices increased by 0.5% month-on-month, contributing about 0.17 percentage points to the CPI[2] - Food prices decreased by 1.6% year-on-year, primarily due to a high base effect from the previous year, impacting CPI by approximately -0.29 percentage points[5] PPI Insights - PPI's month-on-month decline of 0.2% was influenced by seasonal factors, including high temperatures and increased rainfall affecting construction demand[7] - Prices in the non-metallic mineral products sector fell by 1.4%, while coal mining prices decreased by 1.5%[7] - The prices of high-tech products, such as aircraft manufacturing, rose by 3.0%, indicating a shift towards high-end industrial development[9] Market Outlook - The market is expected to exhibit a dual bull structure in equities and bonds in the second half of the year, supported by a potential easing of US-China trade relations[1] - A-shares are anticipated to experience a structural rally characterized by alternating low-volatility dividends and technology growth[1] - The 10-year government bond yield is projected to decline to around 1.5% amid low probability of large-scale domestic demand stimulus[1]

Core Viewpoint - The "anti-involution" policy has shown effects, contributing to the improvement of the PPI month-on-month in July, addressing the core issue of low-price competition caused by supply-demand imbalance [1][3]. Group 1: PPI Data and Trends - In July, the PPI decreased by 0.2% month-on-month, with the decline narrowing by 0.2 percentage points compared to the previous month, marking the first month-on-month narrowing since March this year [2]. - Key industries such as coal mining, black metal smelting, photovoltaic equipment manufacturing, cement manufacturing, and lithium-ion battery manufacturing saw a reduction in price decline, contributing less to the PPI drop [2]. - Year-on-year, the PPI fell by 3.6% in July, maintaining the same decline as the previous month, with the PPI growth rate remaining in negative territory for 34 consecutive months [3]. Group 2: Impact of Policies - The "anti-involution" policies are believed to have driven the price recovery in cyclical industries, as indicated by the price trends in futures markets for coal, steel, and cement [2][3]. - The central government's emphasis on promoting a unified national market and optimizing market competition order is expected to continue influencing PPI trends positively [3][4]. - The ongoing "anti-involution" policies are likely to favor leading enterprises, while the exit of outdated and excess capacities may cause short-term market pain [4]. Group 3: Future Outlook - Continuous observation is needed to assess the extent of PPI improvement and whether the year-on-year growth rate can turn positive, as the balance of supply and demand requires time to correct [4]. - The need for effective counter-cyclical policies to stimulate domestic demand is highlighted as crucial for sustaining the effects of the "anti-involution" policies and alleviating competitive pressures among enterprises [5].

Group 1 - The Consumer Price Index (CPI) in July increased by 0.4% month-on-month, reversing a 0.1% decline in June, indicating a recovery in domestic demand [2][4] - The core CPI, excluding food and energy, rose by 0.8% year-on-year, marking the highest increase since March 2024, and has expanded for three consecutive months [2][5] - The Producer Price Index (PPI) saw a month-on-month decline of 0.2%, but this was a narrowing of the decline for the first time since March, suggesting stabilization in some industrial sectors [6][7] Group 2 - The rise in CPI was primarily driven by increases in service prices, which rose by 0.6% month-on-month, contributing approximately 0.26 percentage points to the overall CPI increase [4][5] - Key contributors to the service price increase included airfare, tourism, hotel accommodation, and vehicle rental, which saw significant month-on-month increases of 17.9%, 9.1%, 6.9%, and 4.4% respectively [4] - Industrial consumer goods prices also showed improvement, with a month-on-month increase of 0.5%, influenced by policies aimed at boosting consumption [4][6] Group 3 - The government has implemented a series of macroeconomic policies aimed at enhancing consumption capacity and optimizing the consumption environment, with 19 key measures proposed [2][3] - The ongoing efforts to build a unified national market and regulate low-price competition among enterprises are expected to further stabilize prices [3][6] - The PPI's year-on-year decline remained at -3.6%, but the stabilization indicates a potential turning point for industrial prices, aided by policy measures [6][7]