"Garlic you relentless" comeback inflation really come back?

Inflation rents assets China's central bank

huaerjiejianwen· 2016-11-02 22:42:49

more and more shows that returning inflation seems to be back. Last week, the Wall Street informative

lists some cases of layer inflation, such as coffee, corn, soybean oil and other agricultural products, all kinds of rose colored and black industrial metals, such as Chinese September CPI rebounded sharply.

and the latest evidence is garlic. Now, the wholesale price of garlic has soared to 26 yuan / kg, a six year high. WeChat public number hedge investment research "study found that, compared to the price of meat and eggs, garlic is more sensitive to macroeconomic changes, greater price flexibility, can be regarded as a leading indicator of the economy, usually before the CPI rose.

garlic prices rose from 2014 in the middle of the fermentation, a moderate increase in the beginning of 2016, after starting to accelerate until now hit a new high. Now CPI has been significantly warmer, inflation is expected to have a comeback trend.

many analysts also pointed out that this point. CRE securities bond group said yesterday that inflation expectations or overall warming:

this year, once inflation expectations index had increased obviously, and the early real estate price rebound is a great relationship. In essence, the rapid rise in house prices really can also lead to a rise in market inflation expectations, and eventually led to the rise in inflation levels through conduction. For example, house prices rose - rents rose - service industry costs rose this path. But the impact of rising house prices on the CPI itself is limited, the speed is relatively slow. Therefore, this year's inflation expectations index rose does not bring CPI itself faster rise, despite the trend from the inflation expectations index is still a leading indicator of the level of inflation.

CRE believes that the "trend of garlic" may indicate the level of inflation than expected rebound next year.

recently has been a "garlic you relentless" trend. If so, the future inflation expectations rise, it may be reflected in the overall price rise, so that next year's inflation level may have the risk of over expected rebound.

, however, for the current inflation rise, Haitong Securities Jiang Chao but cautious. He believes that the supply and demand changes in the supply and demand can not escape the price rule, inflation short rise and fall, 2017 year will fall again.

Jiang Chao pointed out that, from a structural point of view, almost all of the PPI's rise from the price of the production data. The price of living materials from March has been basically flat, almost no contribution to the overall recovery of PPI.

and crude oil, coal, iron and steel rose from the power supply or demand in the short term is expected to improve, or difficult to continue. With the real estate regulation significantly overweight, car tax cuts expire demand risk fell sharply. Then, overcapacity in these industries will once again exposed the ills. Industrial Supply and demand in 2017 is expected to be reversed, the price of industrial goods as well as inflation or re.

monetary policy turning point is coming?

"hedge investment research pointed out that the price of garlic always start from the period of loose monetary policy after the rise, soaring with total countries to tighten monetary policy, continue to improve the benchmark interest rate, increase the deposit reserve ratio. This phenomenon is very obvious in 06-07 and 10-11 years.

so this is the point of the policy of the inflection point is about to come?

based on inflation will be short or long down logic, Jiang Chao believes that monetary policy will tighten in the short term, but in the long run will remain loose.

short term liquidity tightening, but long-term liquidity loose. short term three factors restricting the China central bank monetary easing space: the first meeting of the Political Bureau proposed to restrain asset bubbles, prevent financial risks and risk prevention policies become the main tone; second, with the Federal Reserve to raise interest rates gradually, a stronger dollar, devaluation of the RMB exchange rate stable increasing pressure, increased motivation; third, low base stacking PPI picked up in the 4 quarter rebound in inflation risk. Overall, RRR or continue to be delayed, and the reverse repurchase period is elongated means the rising cost of short-term funds, end funds or continued tight. But the real estate regulation overweight increased downside risks to the economy, also means that the demand for long-term funds decreased, long-term liquidity tends to loose. The bond market is still to control the risk of

CRE pointed out that the core issue of the bond market is late short-term capital improvement could continue, especially at high pressure in the open market, the central bank is also put substantial liquidity?

if not, then the funds still face greater volatility later. In addition, the economy is also expected to improve over the market earlier in the market is expected to be pessimistic about the economy needs to be revised. Therefore, the short-term market driven by the factors from the initial funding constraints into a moderate easing of funds, but the tension is expected to remain stable and improve the combination of the economy, which does not itself on behalf of the slowdown in market pressure.

, of course, more long-term perspective, the market's inflation expectations may be fully heated, or means that next year's inflation level there is a risk of over expected rebound. In general, the proposed mechanism is still dominated by risk control.

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