China's CPI inflation remained unchanged at 1.2% year-on-year in May, marginally softer than our forecast and market expectations for a slight uptick to 1.3%. Inflation has been at or over 1% for the past 4 months, and in positive territory for 8 straight months, suggesting the reflation trend is solidifying. Consumer prices were supported by a major surge in the transportation fuels subcategory, which rose 21.1% YoY in May, reflecting higher oil prices. While local gasoline prices generally didn’t rise as much as Brent crude oil, we saw moves of around 24% above pre-Iran War levels. If crude oil prices remain ... (full story)