China's CPI falls for third straight month

The news: Consumer prices in China fell for the third straight month in December, decreasing by 0.3% as domestic demand continues to idle in the world's second-largest economy.

The numbers: The 0.3% was slightly better than analysts' forecasts of a 0.4% drop, and was a narrowing of the 0.5% decline the month before. Producer prices fell 2.7%, steeper than forecasts of 2.6%, but a slight improvement on November's 3.0% slip.

The context: Continuing deflation in China could embolden calls for more stimulus from Beijing, Bloomberg reports, which could include cuts to key policy interest rates as early as next week. An ongoing liquidity crisis in the property sector, poor consumer confidence and weakness in exports are all creating headaches for China's policymakers as they look to turn the current trend around.