US Retail Sales Negative for Two Consecutive Months; January Dips 0.16% Beating Expectations, While Online Shopping Stands Strong

China's February PPI Decline Narrows to 0.9%, Beating Expectations; Policy Effects Drive Stabilization of Industrial Product Prices

Core Overview: According to the latest data, China's Producer Price Index (PPI) in February 2026 fell by 0.9% year-on-year, further narrowing from the previous value of -1.4% and beating the market consensus expectation of -1.1%, marking the smallest decline in over a year and a half. Looking at the month-on-month growth rate, the PPI rose by 0.4% month-on-month, showing positive growth for five consecutive months. The data reflects that driven by Lunar New Year factors and macroeconomic policies, the deflationary pressure on factory-gate prices of industrial products has shown signs of substantial relief. Key Components: In terms of sub-category performance, areas related to the modernized industrial system showed strong recovery momentum. Benefiting from the "AI+" wave, the manufacturing prices of electronic components and special electronic materials rose by 4.9% year-on-year. At the same time, the comprehensive remediation launched by the government targeting "involution" (excessive internal competition) in key industries has shown results. For example, the manufacturing price of lithium-ion batteries ended 33 consecutive months of decline, turning from -1.1% in the previous month to a year-on-year increase of 0.2%; the manufacturing price of solar equipment and components also increased by 3.2%, with the growth rate significantly expanding compared to the previous month. Deep Attribution: Officials from the National Bureau of Statistics of China pointed out that the core driving force behind the continued narrowing of the PPI decline comes from the manifestation of the integrated effects of domestic macroeconomic policies. As capacity governance policies in certain industries are implemented, the market competition order is gradually optimized, driving prices to stabilize and rebound. In addition, the upward trend in international commodity prices (such as fluctuations in international gold and oil prices) has also provided a certain degree of transmission support for domestic raw material prices, allowing overall industrial product prices to show a trend of positive changes. Outlook and Risks: Looking ahead to the short term (1-2 months), as the Spring Festival effect fades, market focus will return to the sustainability of real industrial demand; recent geopolitical tensions in the Middle East have pushed up international oil prices, which may bring imported inflation support to energy-related sectors. In the medium term (3-6 months), whether the PPI can successfully escape the negative growth territory still highly depends on the implementation effects of China's real estate and domestic consumption stimulus policies; if the recovery of terminal demand falls short of expectations, or if the global supply chain faces a new round of geopolitical shocks, it could still interfere with the pace of recovery of industrial product prices. Web Search Reference Sources: http://www.aastocks.com/tc/forex/news/comment.aspx?source=AAFN&id=NOW.1507491&cur= https://udn.com/news/story/7332/9367922 https://finance.mingpao.com/fin/instantf/20260309/1773020932933/%E5%85%A7%E5%9C%B02%E6%9C%88cpi%E5%8D%871-3-%E5%8B%9D%E9%A0%90%E6%9C%9F-ppi%E8%B7%8C%E5%B9%85%E6%94%B6%E7%AA%84%E8%87%B30-9-%E5%90%8C%E5%8B%9D%E9%A0%90%E6%9C%9F