FXStreet (Delhi) – Peter Rosenstreich, Head of Market Strategy at Swissquote Bank, notes that the China’s headline CPI inflation eased to 1.3 % y/y in October, down from 1.6% in September, against a consensus of 1.5%. Key Quotes “The decline was largely due to a moderation in food prices. PPI deflation was flat at -5.9% y/y in October making the print the most recent in nearly four years of contraction. The inability for the PBoC and government measures to stimulate inflationary pressures indicates that we should see additional easing measures.” “We anticipate two 25bp cuts in the benchmark rate and three cuts in the RRR by the end of 1Q 2016. As for the yuan we are in the extreme minority in predicting appreciation in 2016. We base our bullish yuan forecast on expectations that inclusion into the IMF SDR will warrant the PBoC to create the impression of reducing the yuan’s undervaluation. Secondly, the belief that current easing measures will support growth mid-2016 is currently underestimated by investors.” For more information, read our latest forex news.