Week in review

Results season: The Bank Negara Museum and Art Gallery. The central bank is expected to announce its international reserves as at March 15 on Wednesday.

Inflation is easing

THE February 2022 consumer price index (CPI) will be published this week alongside the external trade statistics and leading index.

Economists expect the headline figure to be slightly lower than the month prior.

Malaysia’s rate of inflation in January slowed to 3.7%, as price growth in the country remained on a downtrend that began in October 2022.

According to a Reuters survey, the CPI is expected to grow by 3.6%, while the trade surplus at RM18.3bil.

Malaysia’s CPI is expected to be 3.6% by the end of this quarter, according to Trading Economics global macro models and analysts’ expectations.

Meanwhile, Bank Negara is expected to announce its international reserves as at March 15 on Wednesday.

Singapore price pressures

HEADLINE inflation could slow slightly to 6.4% year-on-year (y-o-y), but core inflation is likely to heat up further to 5.6%, according to ING.

Faster inflation is expected to weigh on overall retail sales for at least the first half of the year.

ING said elevated inflation could produce a potential policy response from the Monetary Authority of Singapore (MAS) at the April meeting.

It expects MAS to retain its current hawkish stance, given the significant challenges faced by Singapore’s growth outlook.

Bloomberg estimates headline inflation at 6.5% y-o-y, while UOB Global Economics & Markets Research estimates 6.8% y-o-y from 6.6% y-o-y in January.

Federal Reserve moves

ACCORDING to a Bloomberg survey, 69 out of 85 economists expect the Federal Reserve (Fed) to continue the rate hike cycle in the March Federal Open Market Committee or FOMC meeting with a 25-basis-point (bps) hike, bringing the Fed funds target rate to a range of 4.75% to 5%.

Seven of the economists expect a 50-bps hike, eight expect the Fed to stay on hold and one analyst expects a 25-bps cut.

UOB said the latest February US inflation and employment reports reaffirmed its view that the Fed was not done with tightening yet, given the continued wage growth and the price developments seen in housing, food and services costs.