NEER Retreats From Cycle High, CPI In View

The SGD NEER (per Goldman Sachs estimates) is marginally softer today, NEER printed a cycle high on Friday before moderating in recent dealing. However, we do sit ~0.5% below the top of the trading band, slightly more elevated compared to early Feb levels.

• For USD/SGD, the pair continues to be driven by the broader greenback trend. Bulls faced resistance above $1.34 on Friday. The pair last prints $1.3365/75 ~0.1% firmer today.
• January CPI is on the wires on Thursday, the print emerges as a key input into the MAS meeting in April. The Bloomberg survey median looks for a 7.1% YoY, rising from 6.5%. The Core measure is estimated at 5.7%, the prior print was 5.1%. At its October meeting MAS had forecasted headline inflation at 5.5-6.5% in 2023 and Core Inflation at 3.5-4.5%.
• The rise in the good and services tax from Jan 1 is a key driver of the firmer headline forecast. Underlying core pressures are still expected to remain firm though, given a tight labor market.