Chinese consumer inflation came in a little under forecast on-year in March, while producer prices were slightly better than expected.
The consumer price index (CPI) rose 2.3 percent on-year in March, compared to a 2.5 percent forecast by a Reuters poll and in line with February's 2.3 percent on-year reading. Consumer inflation was down 0.4 percent on-month.
"The real focus will be on food inflation," Angus Nicholson, market strategist at IG, said ahead of the data drop. Food price CPI jumped 7.6 percent in March compared to the same period a year ago.
Food prices, which made up roughly one-third of the CPI calculation in 2015, rose to a six-month high in February on the back of tighter vegetable supply as a result of cold weather, as well as increased demand during the week-long Lunar New Year holiday.
"Food prices jumped 7.3 percent on-year in February, yet core CPI and non-food CPI both eased. This potentially creates a headache for China's central bank as further monetary policy easing is clearly necessary, but out of control food price inflation could restrain their ability to ease as much as is necessary," Nicholson said in a note.
Beijing targets inflation of about 3 percent.