China's producer prices rose unexpectedly for the first time in nearly five years. The government has been trying to stem inflation by raising interest rates and cutting subsidies on fuel, food and other basic commodities. Consumer inflation also beat predictions, thereby easing worries regarding China's economy following weak trade data the previous day which rattled the global markets. " An uptick in inflation, if sustained, would be good news for China's ability to service its overhang of corporate debt. With low interest rates keeping debt service costs in check and producer prices rising, the outlook for Chinese industrial profits is improving", says PNC Financial's Bill Adams.
China's producer prices rose unexpectedly for the first time in nearly five years. The producer price index rose 0.1% in September from a year earlier, marking good news for the Beijing government which is trying to reduce corporate debt. Consumer inflation also beat predictions, thereby easing worries regarding China's economy following weak trade data the previous day which rattled the global markets. "An uptick in inflation, if sustained, would be good news for China's ability to service its overhang of corporate debt. With low interest rates keeping debt service costs in check and producer prices rising, the outlook for Chinese industrial profits is improving", says PNC Financial's Bill Adams.