Inflation Beats Estimates

SGD: Singapore core inflation, the central banks preferred measure rose 0.5%, above estimates of 0.4%, headline CPI roe 1.3% against 1.2% expected. Singapore dollar strengthens following the release, USD/SGD last making fresh session lows at 1.3282, but still within yesterday's range.

• The MAS kept monetary policy unchanged at its April review, citing low core inflation. "Although MAS core inflation is expected to rise gradually this year from its current low levels, it will remain short of its historical average" the central bank said. A less dovish MAS and upgraded growth forecasts saw SGD strengthen in the wake of the announcement last week.
• In its outlook MAS expected inflation in Singapore to rise at a more gradual pace in the second half of this year despite some upside risks to global price pressures. "While higher global oil prices will continue to pass through to domestic prices, surplus oil production capacity should cap further large price increases. Lingering negative output gaps in a number of Singapore's key trading partners should also keep overall imported inflation contained," it said.