Cross-bank: Price guarantee Big jump probability is not big

Summary: The National Bureau of Statistics released today data showed that February CPI growth of 5.4% 2.7%,ppi increase, the Bank of Communications Finance Research Center released today reported that prices to maintain an upward trend, the probability of a big jump. Looking ahead, the Bank of Communications Financial Research center that the current overall upward trend in prices, the international commodity price-led import inflationary pressure will continue to increase, the last year, the excessive use of money and credit caused by inflationary pressure may lag behind, the price reform of resource products will continue to move forward, The superposition of these price factors may lead to a sustained rise in future inflation expectations. Therefore, we should use a variety of policy instruments flexibly to strengthen the guidance and resolution of inflation expectation.　　The following is the original version of the report. February 2010 Price Data Comment Traffic Banking Financial Research Center One, the CPI rebounded sharply, PPI continued to rise sharply, the CPI significantly increased year-on-year growth. CPI continued to rebound steadily in the two months to 2010 years ago, after a sharp rebound to positive growth at the end of last year. The CPI rose 2.7% per cent year-on-year in February, up 1.2% percentage points compared with last month. Among them, food class rose 6.2%, pull CPI rose 2%.　　Residential prices rose 3% per cent, boosting CPI by 0.4%. The CPI rose 1.2% per cent in February. CPI significantly increased due to the 09 Spring Festival time in January led to a lower base, coupled with climate factors and short-term residents ' income concentration increased more led to the expansion of consumer demand, these factors superimposed on food prices have increased significantly year-on-year, as well as tobacco and supplies and other non-food prices because of the spring festival factors stable rise,　　In addition, the tail factor pulled up CPI0.8 a percentage point.　　However, during the Spring Festival in February, pork and other agricultural products prices rose significantly below the historical average, after the food prices also showed a significant retreat, in addition, as the weather, climate factors on the CPI pulling effect weakened, the future food price rally will tend to smooth. PPI continued to rise steadily, the year-on-year growth rate continued to expand. February, factory prices continued to rise sharply, a sharp rise of 5.4%, compared to January 1.1%, the chain Rose 0.4%. Raw materials, fuel, power purchase prices continue to grow 10.3% year-on-year.　　This is mainly due to the high level of international commodity prices in successive months. The February CRB Index surged 27% per cent year-on-year. Although the price of domestic means of production fell slightly, but chemical products, coal, refined oil and so on still have a significant rise. Because of seasonal factors, the price of subsistence has increased. At the same time, a sharp rise in PPI was also driven by a lower base in the same period last year.　　The February warping factor pushed PPI4.5 a percentage point. Second, the first half of the price is in the rising channel, the possibility of rapid jump is relatively small recently, the upward trend in prices has not changed, in the medium and long term, the overall price level will continue to rebound. The main reasons are as follows: first, the economy continued strong rebound momentum leading pricesUpward trend.　　At present, the new cycle of China's economic rise has been opened, industrial production and consumption remain strong, exports continue to recover, the first half of the output gap is expected to be repaired, the overall demand for sustained expansion will lead to price continued upward. Second, the more well-off overall liquidity on the price of the pressure will be gradually reflected in the later stage. The inflationary pressures of the 2009 day credit have not gone away. There is a relatively stable advance relationship between M1 and CPI, and the fluctuation of CPI is 12 months behind the fluctuation of M1.　　September 2009 M1 growth rate of 17 months to the first Super M2, the formation of "Horn", the rising price of the pressure will be gradually released in 2010. Third, strong domestic demand and external demand will drive the acceleration of industrial recovery, thus driving the increase in capacity utilization, and significantly lift the demand for industrial products; On the other hand, with the arrival of the construction season after the Spring Festival, the restart of a large number of infrastructure projects will push up investment demand, lifting some basic raw materials　　This will push up the price of the means of production and push the PPI rally because of its convergence with PPI. Four is the tail factor positive effect to help push prices. The lower base of the same period last year, the CPI is the tail factor will rise significantly in the future, and reached a peak of 2.1% in 6 July, while the base change in 2010 PPI influence more, 2010 year PPI warping factor will reach 3%. Five is the rapid rise in domestic labor prices and potential future upward expectations. The spiralling price and wage spiral caused by the excessive rise in migrant workers ' income will push inflationary pressures to be reflected in the consumer sector and in industrial prices.　　Currently in coastal and inland provinces of the growing enterprise "migrant workers shortage" is a true portrayal.　　Although the medium and long term price upward trend will not change, but in the short term price growth will tend to be smooth, the possibility of rapid jump is much lower. The main reasons are as follows: first, as the weather warms up, the difficulty of improving traffic conditions, short-term agricultural supply shortages will be significantly eased, and pork prices in the short term upward pressure is not. In the long run, agricultural stability, good harvests and abundant supply of agricultural products market.　　The slowing of food prices will naturally slow down the overall role of CPI. The second is that the dollar rally since the end of last year will also reduce domestic inflationary pressures.　　The dollar index has rebounded from 75 to around 80 in recent months, leading to an increase in the renminbi's real effective exchange rate, which will effectively ease the inflationary pressures of imported inflation caused by rising international commodity prices. To sum up, we expect the future CPI, PPI will continue to rebound steadily. With food prices slowing, CPI growth will rise steadily over the next few months and is unlikely to soar rapidly. And with the rapid rebound in the industry after the Spring Festival, investment demand expansion, the continued rise in production price will dominate PPI continued upward. If there are no other sudden factors and in the timely regulation of policies, 2010 year's annual CPI increase may be between 3%-4%, PPI year-on-year rise in 4%-4.5%. The overall inflation rate for 2010 will be in relativeGentle State. Third, the right remedy, to strengthen the guidance of inflation expectations and to resolve the current overall upward trend in prices unchanged, international commodity price-led import inflationary pressure will continue to increase, the last year, the excessive investment in monetary credit caused by inflationary pressure may lag behind, the price reform of resource products will continue to move forward, The superposition of these price factors may lead to a sustained rise in future inflation expectations.　　Therefore, we should use a variety of policy instruments flexibly to strengthen the guidance and resolution of inflation expectation. At present, the excess liquidity caused by excessive money and credit is always the basic factor that pushes the inflation pressure in China. At present, the excess liquidity should be recovered in time to keep the liquidity reasonable and moderate. The operation means of monetary policy should be based on open market operation, increase of legal reserve reserve ratio and Credit window guidance.　　During the year, although the interest rate hike is a big probability event, but short-term central bank interest rate increase pressure is not big, the likelihood of raising interest rate in the first quarter is less. In addition, the price regulation should reasonably control the prices of public goods such as hydro-gas and other resources, the reform of the price formation mechanism of resource products should take into account the residents ' affordability and adaptability, accelerate the reform of income distribution system, raise the income level of residents, reduce the fluctuation of commodity demand, encourage enterprises to "go out", Increase the capacity of foreign-related industries to expand investment in the global scope of better allocation of resources.