Oil breaks US$100, Wall Street retreats and bond yields rise, inflation is becoming the market’s biggest risk again Global markets are starting Thursday in a more defensive position. Brent crude has broken above US$100 a barrel , U.S. Treasury yields are pushing higher, and Wall Street fell for a third straight session as investors reassess whether central banks may need to keep tightening rather than easing. For Malaysian investors, the key chain today is increasingly clear: Oil → inflation → interest rates → bond yields → USD/MYR → Bursa valuations. 30-second market snapshot Market / Asset Latest 🇺🇸 S&P 500 7,636.36, -0.48% 🇺🇸 Dow Jones 52,380.66, -0.77% 🇺🇸 Nasdaq 26,253.34, -0.64% 🇲🇾 FBM KLCI 1,714.34, virtually flat 💵 USD/MYR ~4.06 🇺🇸 U.S. 10Y Treasury ~4.84% 🇺🇸 U.S. 2Y Treasury ~4.42% 🥇 Gold ~US$4,396/oz 🛢️ Brent crude US$101.21/bbl 🛢️ WTI crude US$96.05/bbl ₿ Bitcoin ~US$79,300 🇯🇵 Nikkei ~64,760, -0.6% this morning Brent jumped about 3.4% Wednesda...
Malaysia's headline inflation remained steady in June, with the consumer price index (CPI) rising by 2.0% year-on-year (y-o-y). This increase was driven by higher prices in restaurants, utilities, and food, according to official data released on Wednesday.
Key Highlights
CPI Growth:
- The CPI, which serves as Malaysia’s primary gauge of inflation, increased by 2.0% in June compared to the same month in 2023.
- This matched the pace recorded in May and was slightly lower than the 2.2% increase predicted by a Bloomberg survey.
Sector-Specific Increases:
- Food and Beverages: This category, which constitutes nearly 30% of the CPI’s weightage, saw a 2.0% increase in June.
- Housing, Utilities, and Fuels: Prices in this sector rose by 3.2%.
- Restaurants and Accommodation Services: This index climbed by 3.3%.
Sector-Specific Declines:
- Clothing and Footwear: This category experienced a 0.1% decrease in June from a year earlier.
- Insurance and Financial Services: Also saw a 0.1% decline.
Transport Sector:
- Inflation in the transport sector, which includes the purchase of vehicles and public transport services, rose by 1.2% y-o-y in June. This was a slight decrease from May’s rate of 1.4%, following the re-targeting of diesel subsidies.
Core Inflation:
- Core inflation, which excludes volatile items and price-administered items to measure domestic-driven inflation, stood at 1.9% in June, maintaining the same pace as in May.
Official Forecasts:
- The official forecast for headline inflation in 2024 is between 2% and 3.5%, compared to 2.5% in 2023.
- Core inflation is expected to be between 2% and 3% in 2024, against a 3% average in 2023.
Conclusion
Malaysia's CPI growth in June remained steady at 2.0% y-o-y, driven primarily by increases in food, utilities, and restaurant prices. While certain sectors like clothing, footwear, and financial services saw slight declines, the overall inflation rate matched the previous month’s pace. With official forecasts projecting a headline inflation rate of 2% to 3.5% for 2024, Malaysia's inflationary trends will continue to be closely monitored.
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