Asia Economics Comment:So,inflation?

4Bit of a wake-up call in the US on Friday: average weekly earningsjumped in September. In emerging Asia, input and output priceshave also spiked again last month. Meanwhile, energy costs havebeen quite volatile, and metal prices look lofty. Headline inflationhas come in higher in several Asian economies, notably in Chinaand in India (the RBI even raised its CPI forecast while cutting itsGDP growth forecast). Is this an inflection point? Not exactly. Lookclosely and it’s mostly headline noise, with underlying pricepressures still well contained. That said, output gaps in emergingAsia aren’t overly large anymore and may close in 2H 2018. If Chinadoesn’t cool, things could quickly change