Singapore: Inflation forecast to pick up pace in 2021 – UOB

Pablo Piovano FXStreet

Economist at UOB Group Barnabas Gan assesses the latest inflation figures in Singapore.

Key Quotes

“Singapore’s consumer price index rose for the second straight month at +0.2% y/y (0.0% m/m sa) in January 2021. This compares to market estimates for CPI to expand 0.2% y/y (-0.2% m/m sa). Core prices, however, fell for its 12th consecutive month at -0.2% y/y.”

“Similar to the previous readings, consumer prices were supported by food (+1.5% y/y), communications (+1.2% y/y) and household durables & services (+1.0% y/y).”

“The balance of risk for inflation in 2021 is likely tilted to the upside. The rebound in commodity prices, including Brent crude oil prices, could add to rising inflation risk. Coupled with the dissipation of disinflationary effects by government subsidies seen in 2020, Singapore’s electricity & gas tariffs will also likely pick-up in the year ahead. In line with the global economic recovery backdrop, domestic services prices and accommodation costs could also increase in 2021.”

“Still, the uncertainties surrounding COVID-19 and the negative impact it has on economic growth could mitigate price pressures.”

“In all, we expect both headline and core inflation to head higher and average a moderate 0.5% in 2021. This compares to the official outlook for headline inflation to range between -0.5% and +0.5%, and core inflation to average 0.0% to 1.0% in the year ahead.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold looks to regain $4,200 amid pre-US CPI repositioning

Gold is stretching higher toward $4,200 on Friday, extending recovery from two-month lows. US Dollar eases in tandem with Oil prices and Treasury yields, awaiting US sentiment data. The tide seems to be turning in favor of Gold, but the daily RSI is still bearish.

Ethereum drops below $2,500 as rising Treasury yields trigger selling pressure

Ethereum (ETH) fell below $2,500 on Thursday, down nearly 4% and extending losses for a third consecutive day. The decline follows rising Oil prices and US Treasury yields over the past few days. The 10Y Note Yield reached a 24-year high at 5.35%, and the 30Y Note Yield climbed above 5.70% earlier on the day, sparking major distributions in the crypto market.

The inflation illusion: How government formulas shape the data

Every month, the government releases a barrage of economic statistics. Employment, inflation, consumer spending, economic growth, and countless other measurements are presented as objective facts that policymakers, investors, and the public can use to understand the economy. But what happens when the methodology used to produce those numbers changes?

The UK 30-year gilt just hit a 1998 high. Is that good or bad for the British Pound?

The yield on the UK's 30-year government bond, or gilt, went through 6% on October 1 for the first time since early 1998, and on Monday the Pound was at its strongest against the Euro since June 2025. The gilt market's 28-year high is mostly someone else's. Since early May, the 30-year gilt yield has risen about 0.15 of a percentage point and the US 30-year about 0.7.