China's inflation likely eased again in May

China's inflation likely eased again in May
China's CPI inflation is expected to have eased again to 1.3% y/y (-0.1% m/m) in May from 1.5% in April. Food prices likely dropped 0.8% m/m (-0.96% in April) on lower vegetable, fruit and egg prices, based on interim data from the Ministry of Commerce and the National Bureau of Statistics. 

Food inflation likely dropped to 1.8% y/y from 2.7% in April as the positive base effect reversed. Non-food prices likely rose 0.2% m/m, reflecting gasoline/diesel price hikes and the recent uptick in rents. 

"We forecast non-food inflation at 1.1% y/y, up from 0.9% prior. Producer prices likely fell 4.4% y/y, versus a 4.6% drop in April", says Barclays.

The PPI rose m/m in May - after 11 months of declines - as rising prices of non-ferrous metal, rubber and chemical products offset the drop in energy and ferrous metal prices.