Hong Kong will announce April CPI numbers on 21 May. Headline inflation of 4.3% y/y is expected, down from 4.5% in March. The expected drop reflects a stabilising housing component (for now), continuing deflationary spillover from mainland China’s consumer prices, the lagged impact of lower global oil prices, and weaker local sentiment weighing on services prices. “While we expect downward pressure on consumer prices to continue in the coming months, we see a risk that CPI inflation will pick up again towards the year-end”, says Standard Chartered.Year-on-year changes in the residential property rental index usually lead headline CPI. With this index accelerating over the past nine months, the recent stabilisation in the CPI housing component could be transitory.
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