CPI inflation projected at 2.3% YoY

Higher festive prices were cited.

In Hong Kong, it is expected that CPI inflation will come at 2.3% YoY.

According to a research note from Citi, this will likely reflect higher festive prices (for food and tour groups especially) but sharp discounts (for durable goods, clothings) as retailers try to boost sales given diffcult retail environment.

Further, energy price declines also likely remain a drag on CPI. Citi sees disinflation to continue after the festive season, in the sluggish macro backdrop.

Here's more from Citi:

In the Philippines, on trade, we expect imports to drop by 11.2% YoY partially offsetting export weakness in Jan such that the resulting trade deficit incurred was US$446mn. We continue to expect unchanged overnight policy/SDA rates (4%/2.5%) in next week’s Monetary Board meeting.

In Singapore, we expect CPI inflation to contract by -0.9% YoY in February while core inflation remained positive at 0.2% YoY. Budget 2016 will have to tread a fine balance between fiscal prudence and stimulus. The overall fiscal position likely saw a smaller than expected deficit of S$3.2bn or 0.1% of GDP in FY16 and points to a cumulative S$6.9bn of surpluses in FY12-15 to be added to Past Reserves.

In Taiwan, CBC likely to cut rates to help curb hot money inflows and keep monetary conditions accomdative. We see a total of 3x12.5bps cuts this year. Industrial production likely to post the 10th consecutive YoY decline (-2.8% YoY) in Feb given poor exports trend and less working days during CNY. The CNY holiday and poor exports data suggest that orders for Feb likely remain negative. We don’t see orders recovering significantly till closer to 2H.

In Thailand, amid US Fed likely on hold, strong fiscal spending and larger share of workers with regular weekly working hours, MPC is likely to keep its policy rate unchanged at 1.5%. Despite higher annualized headline inflation (1%) posted recently owing to elevated food prices, inflation expectations (1yr) breached downside of 2% in Jan for the first time.