China, Russia Consumer Inflation Falls 0.4% August

China's consumer price index (CPI) fell 0.4% year-on-year in August, marking a return to deflation and a larger decline than market expectations. This drop was primarily due to lower food prices and a high comparison base from the previous year, while core CPI, excluding food and energy, rose for the fourth consecutive month, indicating some positive impact from government policies to boost domestic demand. The producer price index (PPI) also remained in negative territory but showed signs of improvement with a smaller year-on-year decline of 2.9%, the first narrowing since March, suggesting easing factory deflation. These developments reflect ongoing challenges with weak consumer demand and supply-demand imbalances, but government efforts such as anti-competition measures and macroeconomic policies appear to be mitigating some pressures. The deflationary trend poses risks to corporate earnings and household incomes, prompting speculation that policymakers may consider further stimulus to sustain economic growth. Market reactions were muted, with bond yields and currency values largely steady amid these mixed inflation signals.