Feb Inflation Below Expectations, Core Flat M/M, But Still Elevated Y/Y

Singapore Feb inflation picked up in m/m terms to 0.6% from 0.2% in Jan. This wasn't enough to see y/y momentum accelerate though. The headline y/y eased to 6.3%, from 6.6%, with the market consensus at 6.4%. The core was steady at 5.5% y/y, although this was also sub market expectations at 5.8%.

• Headline inflation is slowly moving off 2022 peaks (7.5% y/y Sep last year). Core is proving to be much more stubborn, holding around at recent highs, although the MAS may take some comfort we aren't accelerating further. Indeed, the core measure was flat in m/m terms.
• Still, outside of declining transport costs, which moved to 9.7% y/y from 11.9%, most other sub-categories stayed around their recent y/y pace. So, it may be too early to expect a meaningful pull back in core inflation pressures.
• Around mid April should be the timing of the next MAS policy meeting. The central bank has to grapple with expectations around the inflation outlook but also recent volatility in global markets and paring back of terminal rate expectations.
• The SGD NEER is just off fresh highs, although this may reflect Singapore's safe haven characteristics attracting capital inflows as opposed to fresh tightening expectations.