China's April PPI May Accelerate Recovery, PPI-CPI Spread Gains Spotlight

China's macroeconomic data for April is about to be released one after another, with various indicators showing divergent trends. Beijing time next Monday at 9:30 AM, China will publish the CPI and PPI data for April.

On the price front, the rapid rise in PPI year-on-year readings has become the most noteworthy change this month, and the gap between PPI and CPI is expected to significantly widen.

The ongoing geopolitical conflicts in the Middle East continue to push up international oil prices, and the rise in prices of non-ferrous metals and chemical products transmitted to the domestic market has kept both the raw material purchase price index and the factory price index for the manufacturing industry high in April.

The market expects that the PPI year-on-year will rise rapidly to the range of 1.8%-2.6% in April, while CPI year-on-year will remain near 1.0% due to weak food prices and the decline in service industry prosperity. The PPI-CPI gap has significantly widened, reflecting that the price rise from upstream to downstream transmission is still not smooth, which may further differentiate the profit distribution pattern among enterprises.