Yesterday's Recap
Mainland China's inflation data disappointed, with CPI declining -0.1% YoY against expectations of 1.2% and prior 1.3%, reflecting subdued consumer spending despite energy price surges from Middle East conflicts. Monthly CPI fell sharply by -0.7%, missing the -0.2% consensus and reversing the prior 1% gain, underscoring deflationary pressures in non-food sectors. Producer prices rebounded to 0.5% YoY, beating the 0.4% forecast and improving from -0.9% previously, driven by war-induced oil shocks that ended a prolonged deflation streak for factories.
Market reactions were positive across Greater China, as Shanghai Composite rose 0.51% to 3,986.23 and CSI 300 gained 1.54% to 4,636.57 on easing bets, while Hong Kong's Hang Seng advanced 0.55% to 25,893.54 amid stable yuan dynamics. Taiwan's TAIEX outperformed with a 1.60% increase to 35,417.83, supported by strong semiconductor export outlooks despite global chip curbs. Currency markets held steady, with USD/CNY edging down 0.04% to 6.83 and USD/HKD slipping 0.03% to 7.83, reflecting limited volatility.
No major data emerged from Hong Kong or Taiwan, though cross-strait trade flows remained resilient.
The Day Ahead
Mainland China's trade data looms on April 13, with exports expected to slow to 8.3% YoY growth from 39.6% prior, amid global demand headwinds, while imports are forecast at 11.1% YoY versus 13.8%, potentially signaling domestic recovery trends. The trade balance is projected to widen to 112 billion from 90.98 billion, offering insights into yuan stability and external surpluses. On April 15, key releases include the house price index, with prior -3.2% YoY hinting at ongoing property sector weakness despite stimulus efforts.
GDP growth is anticipated at 5% YoY and 1.4% QoQ, alongside industrial production at 5.9% YoY, retail sales at 2.4% YoY, and fixed asset investment at 1.8% YTD YoY, all critical for assessing Q1 momentum. No immediate events for Hong Kong or Taiwan, though semiconductor supply chain updates could influence TAIEX. Geopolitical developments, including Middle East tensions, may indirectly impact energy imports and cross-strait relations.
Shanghai vs Hang Seng | Type: market_hloc | Shanghai: 3986 (2026-04-10) | Range: 3813–4183 | Trend(6pt): 4165,4118,4163,4007,3966,3986 | Hang Seng: 2.589e+04 (2026-04-10) | Range: 2.438e+04–2.797e+04 | Trend(6pt): 2.661e+04,2.739e+04,2.659e+04,2.583e+04,2.589e+04,2.589e+04
