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Core Inflation Pressures Still Trending Higher

SGD

Singapore inflation for July came in, on balance, slightly stronger than expected. Headline YoY printed at 7%, in line with expectations but a step up from the previous month of 6.7%. The MoM was +0.2% in line with the market forecast and a down step from the previous month's +1.0% pace. Core inflation was firmer than expected at +4.8% YoY, versus +4.7% YoY forecast.

  • 7 out of 10 sub categories still recorded a firmer or the same YoY pace compared to the previous month. Transport remains the clear standout (+19% YoY).
  • Core inflation is at its firmest pace since 2008 and again came in above market forecasts. This may still see the MAS with more work to do at the October policy meeting.
  • The SGD NEER is off recent highs, in line with broad based USD strength, but we are still +5 above levels from a year ago, so in line with the core inflation pace, but below headline CPI.
  • The NEER is back close to -1% from the upper end of the NEER band. So, there is still scope for higher levels in the lead up to the next policy meeting.

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