China's Factory Prices Rise 5.7% in October as Consumer Inflation Slips to 0.7%: What the Split Means for AUD/USD

China's two inflation measures moved further apart in October. Prices received by industrial producers rose 5.7% on a year earlier, up from 5.0% in September, while consumer prices rose only 0.7%, down from 0.9%, the National Bureau of Statistics said on Monday 9 November at 09:30 Beijing time.

Energy and metals explain most of the factory number. Oil and gas extraction prices were 35.0% higher than a year earlier and coal mining prices 36.6% higher. In the shops, food was 2.9% cheaper than in October 2025, and core inflation, which leaves out food and energy, eased to 0.8%. For currency traders the split matters because it says China's industry is paying more for its inputs while its households are not spending enough to pass those costs on.

Factory prices: energy and metals lead again

Producer prices rose 0.7% on the month in October. That is a slower pace than September's 1.2% jump, but it still lifted the annual rate to 5.7%. Over the first ten months of 2026, factory-gate prices averaged 2.7% above the same period of 2025, so most of the rise has come in the last few months.

Upstream industries did the heavy lifting. Mining prices were 27.9% higher than a year earlier, up from 25.4% in September, and raw materials 11.6% higher, up from 9.4%. Processing industries rose a more modest 3.5%. At the far end of the chain, consumer goods leaving the factory were 0.1% cheaper than a year ago, the same fall as in September. Energy-heavy sectors also rose fast on the month: oil and gas extraction prices climbed 6.0% and fuel processing 6.1% in October alone.

Costs paid by producers are running ahead of what they charge. Purchase prices rose 7.9% on the year and 1.1% on the month, faster than the factory-gate measure on both counts. When input costs rise faster than output prices, margins shrink. That can weigh on profits and hiring even while the headline inflation number looks strong.

Consumer prices: food keeps a lid on inflation

Consumer prices were flat on the month in October after a 0.2% rise in September. Food fell 1.0% on the month and was 2.9% lower than a year earlier, a deeper drop than September's 1.7%. Pork was 8.6% cheaper than a year ago, a smaller fall than the 10.0% recorded in September. Non-food prices rose 1.5%.

Fuel is reaching households, but only in one corner of the basket. Transport fuel prices were 20.2% higher than a year ago and rose 3.8% in October. Services prices, the best gauge of domestic demand, rose just 0.7% on the year, slightly less than in September. Core inflation slipped to 0.8% from 1.0%, and over the first ten months consumer prices averaged 0.9% above 2025.

The NBS moved its price base year to 2025 from January 2026. It says that change adds about 0.06 percentage point on average to the annual CPI series and about 0.08 point to the PPI, so it does not change the picture.

Which industries pushed prices up

These are annual changes in factory-gate prices for the sectors the NBS singled out, with consumer goods at the bottom for comparison. Every figure comes from the bureau's October release.

What it means for AUD/USD

The Australian dollar is the major currency most tied to China's economy, through iron ore, coal, gas and metals. Higher commodity prices help Australia's export earnings, so a strong PPI is not bad news in itself. A weak consumer and a squeeze on factory margins, however, raise the risk that Chinese demand for raw materials slows in the months ahead.

AUD/USD's derived European Central Bank (ECB) reference rate was 0.6894 on Monday, set around 13:15 UTC, several hours after the data. That was a little above Friday's 0.6871, the lowest reference rate in the past 60 trading days, but well below the 20-day average of 0.6990 and the 50-day average of 0.7044. The 14-day relative strength index (RSI) was about 35.5, close to the zone traders usually call oversold. The pair fell sharply even though the Reserve Bank of Australia raised its cash rate to 4.85% on 3 November, as our RBA report covered.

• Support: 0.6871, the 6 November reference rate and the 60-day low. A clear break would leave little nearby support on the reference-rate chart.
• First resistance: the 20-day average near 0.6990, then 0.7034, the 20-day high set on 21 October.
• Outside drivers: US inflation data at 13:30 UTC today will move the US dollar side of the pair, often more than China's figures do.

What it means for traders

• Treat the PPI as a commodity story. It rose because coal, oil, gas and metals cost more, not because Chinese demand is strong.
• Watch services and core CPI for the demand signal. At 0.7% and 0.8%, they point to a soft consumer, which is a risk for Australia's exports later on.
• Expect US data to dominate today. China's numbers set the morning tone in Asia; the US CPI release decides the bigger move.
• Use the AUD/USD analysis for our reference-rate levels and the live price, and read the preview for the September figures and survey data behind this release.

Frequently asked

Sources: National Bureau of Statistics of China: Consumer Price Index, October 2026 (Chinese) · National Bureau of Statistics of China: Industrial Producer Prices, October 2026 (Chinese) · National Bureau of Statistics of China: Industrial Producer Price Indexes, September 2026 · ECB: euro foreign exchange reference rates · National Bureau of Statistics of China: Consumer Price Index, September 2026 · Reserve Bank of Australia: Statement by the Monetary Policy Board, 3 November 2026