Let's focus on our own CPI before worrying about US CPI.
On 23 Aug, Singapore reported core inflation (excludes private transport and accommodation) rose to 4.8% in July from 4.4% in June. This was driven by stronger electricity, food and gas prices. I appreciate the U-Save vouchers for utilities rebate very much now [Sly]
- Previous high for core inflation was at 5.5% in Nov 2008.
Singapore's headline consumer price index (overall inflation) rose 7% year-on-year in July, ahead of the 6.7% reported in June.
It looks like Singapore's inflation has not peaked.
After 23 Aug, STI dropped for two weeks, before rebounding in the past week. See First plot.
- Closest resistance is 3300 with another immediate resistance at 3300.
STI generally follows the S&P 500 trend but with less volatility. See second plot.
Comparing YTD, STI is up 1.96%, while SPX is down -15.63%. See third plot.
Talk about stable. Well done STI!
With Singapore's CPI high and US CPI not dropping as fast as expected, there's no good news to push STI above resistance. I suspect it is going to oscillate between 3300 and 3200 near term, waiting for more data.
In summary, US CPI gives a more global outlook in terms of the inflationary environment we are in. However, it does not impact STI directly. Singapore needs to manage its own inflation, as things have not shown a turn for the better yet.
@TigerStars@Tiger_chat@MillionaireTiger
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