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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
SGD
Today's Singapore inflation data for April came in a little weaker than expected. Still, the SGD NEER is lagging the surge in inflation pressures.
- Headline CPI printed at 5.4% YoY, versus 5.6% expected and 5.4% YoY previously. The MoM fell by 0.1%, versus 0.2% expected. Core inflation was also weaker than expected at 3.3% YoY, versus the 3.4% estimate by the market.
- These are still strong numbers by historical standards and the MAS expects core inflation to be supported by wages pressure from the tight labor market. Headline pressures are also expected to remain elevated given ongoing supply constraints.
- The SGD NEER is up strongly over the past 12 months, as the MAS has started to tighten policy, but is still lagging inflationary pressures, see the chart below.
Fig 1: SGD NEER & Measures Of Singapore Inflation
Source: MNI - Market News/Bloomberg
- Such a backdrop may leave the market speculating on further tightening by the MAS at the next policy meeting in October. The SGD NEER is elevated within the band, see the second chart below, which is the Goldman Sachs estimate.
- It's likely we will spend more time closer to the top end of the band in the lead up to the next policy meeting.
Fig 2: GS SGD NEER Estimate
Source: Goldman Sachs/MNI- Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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