Trump Administration Crisis

Yeah, so in the absence of definitive information on the ceasefire and how exactly this conflict comes to an end. We do, Mike, have definitive data on some of the impacts. And the key one is inflation. And I want to talk about I want to talk about China inflation. So uh US CPI inflation, uh, that's been released our time tonight. Uh, we get our partial reads on on Friday, uh, and all in the US economy, although they're calling, it still looks reasonably resilient, but sneaky old inflation could spoil the party. But we can certainly confirm that there are global inflation pressures when China actually records some inflation. Uh, in particular when that what we sort of term business inflation or factory inflation, the technical term is PPI inflation. Now, Mike, I've bought this up from time to time uh when we've been talking because the PPI inflation in China has been negative and it's been going down. They've had deflation for almost four years. I mean, it's really quite remarkable. Uh, it did tick up marginally positively in in March, 0.5% on year in year basis. But the latest numbers released yesterday, and this remain and after this sort of remarkable run of deflation, we got a print off 2.8%, which doesn't sound very much, but when you've had four years of it going down, it is fairly consequential. So consensus estimates were 1.8%, so it's well ahead of expectations. So factory prices in China are now running at their highest rate of inflation since the COVID pandemic, pushing costs up, importantly, is putting profits in China under pressure. Uh they're under pressure because the demand environment, China is still pretty soggy. The economy's still battling difficult property markets and relatively low levels of growth. So they can't pass on these cost increases, or it's tricky to do it, and that's almost a global problem. Uh CPI inflation came out as well, also surprised for the upside, 1.2%, which looks pretty benign, doesn't it, compared to what we think we're gonna see in New Zealand and Australia. And uh look, the Middle East conflict is the problem. Um actual CPI inflation in China heading up despite the fact that they had a really big slump in food prices. And yeah, you're right, Mike. The the timing of these sorts of announcements around the Chinese economy important because of the big meeting this week between Trump and Xi Jinping, we'd expect some sort of uh announcements. And look, one of the key factors behind these factory inflation going up is Mike is commodity prices, and uh yeah, we I was that's what I was going to talk about.