PREVIEW-China’s economy losing some steam, inflation picks up

* WHAT: China’s official May economic data

* WHEN: Friday, June 11, 0200 GMT

REUTERS FORECASTS:

(all in pct chg y/y)

MEDIAN RANGE APRIL FORECASTS
CPI 3.0 2.3/3.5 2.8 32
PPI 6.9 6.0/8.5 6.8 31
Ind. Output 17.1 16.0/18.0 17.8 32
Urban FAI 25.7 23.8/26.1 26.1 32
Retail Sales 18.5 17.5/21.6 18.5 32

* FACTORS TO WATCH:

If the forecasts are accurate, the Chinese economy is
losing some steam, at least in year-on-year terms. That is only
natural after ultra-fast annual growth at the start of the year
when the base of comparison was much lower.

Factory-gate inflation and consumer inflation are both
expected to have picked up slightly in the year to May. Yet a
low base last year makes it tricky to read too much into the
year-on-year data. Analysts will focus on the sequential pace
for any signs that inflationary pressures have crested as
global commodity and domestic food prices edge down.

* MARKET IMPACT:

The slower output and investment pace should help to ease
worries that the world’s third-largest economy is on the brink
of overheating. But markets can be fickle and the new fear is
that China is slowing too sharply at the same time as the euro
zone sovereign debt crisis weighs on global sentiment.

Any CPI reading higher than 3 percent will reignite
concerns that the central bank will need to move more
aggressively on policy tightening, perhaps by hiking interest
rates, despite signs of softness in the economy. For the
Chinese stock market, which is already one of the world’s worst
performing markets this year, a high inflation reading would be
difficult to digest.

* Report on April’s data: [ID:nSGE64A094]

* China indicator fixed page: (ECONCN: )

* All China economic data (CN/DATA: )

Detailed forecasts:

CPI PPI RS IO FAI ANZ

3.1 6.9 18.6 17.6 26.0 Bank of
China 3.0 6.5 18.3 16.3 23.8 Bank of
Communications 2.7 6.5 18.0 17.5 25.8 Barclays
Capital 3.0 6.7 18.4 17.0 25.8 BNP Paribas

3.0 6.6 18.2 16.9 25.9 BOC
International 3.1 6.9 18.7 16.8 25.1 Capital
Economics 3.0 7.3 17.5 17.0 25.9 CEBM

3.1 8.5 18.3 17.8 26.1 China Merchants
Bank 2.3 6.0 18.4 17.4 24.0 CICC

3.0 6.5 18.6 17.0 25.8 Citi

2.9 6.9 18.2 17.1 25.9 CITIC Securities
2.9 6.7 18.6 17.0 25.7 Daiwa Capital Markets 3.2

6.9 18.3 16.8 25.7 Donghai Securities 3.0
7.1 18.0 17.3 25.9 Fortune Trust 3.1 6.5
18.5 17.2 25.8 Goldman Sachs 3.0 7.0
18.6 17.5 25.8 Guotai Junan Securities 3.1 6.0
18.8 17.9 25.0 Haitong Securities 3.1 7.1
18.3 16.4 25.7 Hang Seng Bank 3.5 ~
18.5 16.0 25.0 HSBC 2.9 6.5
18.3 17.0 25.8 IFR 3.1 6.8
18.1 17.5 25.8 Industrial Bank 3.0 7.0
18.8 18.0 25.8 Industrial Securities 3.0 6.8
17.8 17.0 24.7 ING 3.0 6.9
18.5 17.0 25.7 Mizuho Securities 3.0 6.8
18.5 17.5 25.5 Sealand Securities 3.1 7.0
18.3 17.5 25.4 Shanghai Securities 2.7 6.9
21.6 17.4 24.7 Shenyin & Wanguo Securities 3.1 6.2
18.0 17.0 25.7 Sinolink Securities 3.0 6.9
18.7 17.0 25.0 SJS Markets 3.2 7.4
18.7 17.4 24.7 Standard Chartered 3.2 7.1
18.7 17.4 25.6 UBS 3.0 6.5
18.8 16.5 25.5

Stock Report

(Reporting by Beijing newsroom; Writing by Langi Chiang;
Editing by Ken Wills & Kim Coghill)

PREVIEW-China’s economy (Read more about the fastest growing economy.) losing some steam, inflation picks up