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CPI returns to positive territory

PETALING JAYA: Malaysia’s Consumer Price Index (CPI) returned to the positive territory, registering a 0.2% growth to 121.1 in March after experiencing deflation in the first two months of the year.

Headline inflation contracted 0.7% and 0.4% in January and February, respectively, which sparked deflationary fears amid slowing economy.

The CPI expansion in March was driven by the index of housing, water, electricity, gas & other fuels (+2%), education (+1.3%), food & non-alcoholic beverages (+1.1%), alcoholic beverages & tobacco (+1.1%) and restaurants & hotels (+1%) according to the Department of Statistics.

Chief statistician Malaysia Datuk Seri Dr Mohd Uzir Mahidin said on a monthly basis, CPI also increased 0.2% as compared with February 2019, mainly supported by the index of transport (+2.6%), miscellaneous goods & services (+0.4%) and furnishings, household equipment & routine household maintenance (+0.3%).

However, CPI in the first quarter of 2019 declined 0.3% to 120.8 compared with 121.2 in the same quarter of the preceding year, contributed by transport (-5.9%), clothing & footwear (-3.1%), miscellaneous goods & services (-2.2%) and communication (-1.2%).

On a quarterly basis, the CPI decreased 0.1% against the fourth quarter of 2018.

In terms of overall CPI, four states namely Kuala Lumpur (+0.9%), Penang (+0.6%), Selangor and Putrajaya (+0.3%) and Negri Sembilan (+0.3%) surpassed the national CPI rate of 0.2% in March 2019 as compared with March 2018. Meanwhile, Johor showed the same rate of increase as the national CPI.

The increase in the index of food & non-alcoholic beverages was reflected in most states in Malaysia, with Kuala Lumpur recording higher increases of 4.2% for food & non-alcoholic beverages index above the national index level in March 2019.

MIDF Research expects Malaysia’s inflation to stay low following the lower capped prices of Ron95 and Diesel at RM2.08 and RM2.18 per litre respectively.

“Nevertheless, demand-push factor remains firm amid stable job market and steady wage growth.“

It noted that food component will be the key driver of overall inflation in 2019 driven by low-base effects on top of continued spill over effects from the sales and service tax.

“In addition, being a net importer of food, Malaysia is also exposed to imported inflation due to ringgit depreciation hence initiating food inflation to stay at the high-side.”

Overall, the research house lowered its inflation forecast to 1.1% for 2019.

“We foresee headline inflation rate to average at 1.1% this year from 2.2% we initially forecasted due to lower cap of domestic Ron95 fuel prices at RM2.08. Furthermore, we believe the government is unlikely to remove the cap in the nearest time as the proper subsidy mechanism limiting it to the recipients of the Bantuan Sara Hidup have yet comes to effect.”

Ringgit unchanged as investors study inflation data

KUALA LUMPUR, April 24 — The ringgit was unchanged against the US dollar at close today, as traders digest the inflation report released by the Statistics Department, a dealer said. At 6pm, the ringgit stood at 4.1250/1300 versus…

Ringgit unchanged at close

KUALA LUMPUR: The ringgit was unchanged against the US dollar at close today, as traders digest the inflation report released by the Statistics Department, a dealer said.

At 6pm, the ringgit stood at 4.1250/1300 versus the greenback from 4.1250/1300 recorded at Tuesday’s close.

“The report should provide an unambiguous signal for Bank Negara policy and validate the likelihood of an interest rate cut at next months policy meeting,” the dealer said.

Earlier today, the department released its data for March 2019, which saw inflation rate, as measured by the Consumer Price Index (CPI), increase by 0.2% in the month to 121.1 from 120.9 in March 2018.

Meanwhile, the ringgit was traded higher against other major currencies.

It rose against the Singapore dollar to 3.0351/0392 from 3.0400/0446 on Tuesday and appreciated versus the British pound to 5.3365/3446 from 5.3666/3748.

The local currency strengthened vis-a-vis the yen at 3.6870/6921 from 3.6876/6924 and improved against the euro to 4.6254/6326 from 4.6431/6491 previously. — Bernama

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Asian shares fall despite strong Wall Street, oil retreats

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Ringgit to trade at 4.10-4.15 to the greenback in Q2

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Iranians brace for harder times as US oil sanctions close in

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Asian markets fluctuate as dealers brush off Wall St record

HONG KONG: Asian markets fluctuated Wednesday following a record-breaking close on Wall Street that was fuelled by strong earnings from US big-hitters.

The S&P 500 and Nasdaq scaled all-time highs while the Dow came close after a string of better-than-forecast results from the likes of Coca-Cola, Twitter and Lockheed Martin added to a raft of other recent reports that suggest the economy is in rude health.

Markets welcomed “a really great string of earnings reports, most of them outpacing expectations, as well as some pretty good commentary on future estimates from CEOs”, Jim Paulsen, chief investment strategist at Leuthold Weeden, told Bloomberg News.

“There’s quite a bit of positivity carrying this to new highs.”

However, while Asian dealers were generally upbeat they were unable to use the Wall Street performance to kick on in early trade, with major indexes shifting in and out of positive territory through the morning.

Hong Kong and Shanghai were each down 0.2 percent in the morning while Tokyo headed into the break flat and Seoul slipped 0.7 percent.

However, Sydney rose one percent as a drop in Australian inflation raised the chances of an interest rate cut by the country’s central bank. The reading sent the Australian dollar plunging one percent.

Singapore, Taipei and Manila each rose 0.2 percent, Wellington added 0.7 percent while Jakarta inched up slightly.

Oil prices retreat after rally

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin travel to Beijing next week for another round of high-level talks aimed at resolving their painful tariffs war.

The White House issued a statement saying the latest negotiations “will cover trade issues including intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, purchases and enforcement”, adding that Chinese officials will visit Washington on May 8.

Expectations the talks will eventually end with an agreement between the economic superpowers has helped fire a rally across world markets this year, with the initial row having been the catalyst for a sharp sell-off at the end of 2018.

On oil markets both main contracts were in retreat a day after hitting six-month highs on the back of news that Washington would end a waiver for several countries from US sanctions on Iran.

Prices had already been surging thanks to hopes for the China-US talks and, OPEC and Russia’s output cap, and unrest in Libya and Venezuela.

There is speculation OPEC kingpin Saudi Arabia could step in to fill the void left in the market by the removal of Iranian crude, which would temper prices.

But SPI Asset Management’s Stephen Innes said Riyadh could balk at such a move, having opened the taps when the US unveiled sanctions six months ago only to be “hoodwinked” by the waivers.

“If the US is fully committed to their hawkish Iranian pledge… prices will reprice higher as Saudi Arabia appear tentative about increasing supplies, while it is unlikely (US) shale can fill the void quick enough,” Innes said in a note.

“So to what degree oil markets tighten, and how high oil price goes, will now mostly be dependent on the supply response from OPEC+ group.”