Kai-Tong Macro: Singaporean Monetary Authority's economic outlook supports monetary policy easing in October.
On July 26th, Grace Finance | Shivaan Tandon, emerging Asia economist at Capital Economics, said that the slightly moderate statement made by the Monetary Authority of Singapore (MAS) in its July meeting has given Capital Economics more confidence that MAS may relax its policy in October. Tandon said that MAS now appears to have eased its concerns about inflation, as it has made adjustments to its statements in July and April. He also said that MAS did not provide any important clues about its next steps, but seems more confident about the inflation outlook. In addition, MAS may lower the nominal effective exchange rate range for the Singapore dollar.
Express News | The Monetary Authority of Singapore maintains its monetary policy unchanged for the fifth consecutive time.
Australia is about to release the CPI for the second quarter, and whether the Reserve Bank of Australia will raise interest rates in August depends on it!
The inflation data released on July 31st in Australia may significantly affect policy expectations for the Reserve Bank of Australia meeting on August 6th. Recently, the RBA stated that the bank remains vigilant about the upward risks of inflation. If CPI data for the second quarter rises, this could break the balance and force the RBA to act. The strong market opinion is that if there is a rate hike, it will be the most reluctant rate hike in history, and a reversal may occur in the second quarter of 2025.
Computer Modelling by Morgans Suggest RBA Can Sit Pat On Rates -- Market Talk
DFA: With CPI moving towards the target range, raising interest rates by the Reserve Bank of Australia would be a mistake.
On July 24th, Guolong reported that Krishna Bhimavarapu, an Asia-Pacific economist at Dimensional Fund Advisors, said that recent data released in Australia shows that the year-on-year inflation rate in the second quarter of this year may accelerate again. But the reasons for the earlier interest rate cut are also increasing. The job market is rapidly cooling, and the inflation rate may drop to the target of 2%-3% set by the Reserve Bank of Australia this year, which will be much earlier than the central bank's current prediction of the end of 2025. Therefore, raising interest rates now would be a policy mistake, as the economy is at a critical point, and the unemployment rate may rise to a level that the central bank cannot afford.
RBA Rate Hike Would Be a Mistake as CPI Heads to Target Band -- Market Talk