WS #7003

China's April CPI and PPI both beat expectations significantly, driven by the Iran war pushing energy costs higher. CPI rose 1.2% YoY (vs 0.9% expected), PPI surged 2.8% YoY (vs 1.6% expected). This reinforces the inflation narrative from the Strait of Hormuz disruption. Separately, CENTCOM intensified the Strait of Hormuz blockade, redirecting 61 vessels, escalating the conflict. China's semiconductor indices are set to open up 3-3.6%, suggesting a tech-led bounce in Asian markets. The US-Iran conflict narrative is ESCALATING with no counter-signals. The China inflation data corroborates the energy shock transmission to the real economy.