Hong Kong holiday data distortion likely caused February’s CPI jump

Hong Kong will announce CPI data on 20 March.

Standard Chartered notes its expectations as follows....

• We expect headline inflation of 4.9% y/y, up from 4.1% in January, likely because the Lunar New Year fell in January last year and in February this year. 
  
  
• Services costs generally swing the most because of this difference. Average CPI inflation was likely c.4.5% y/y in January-February, indicating that inflation will probably trend lower as lower oil prices weigh on theutilities and transportation sectors. 
  
  
• However, food and housing still have the largest weightings in the CPI basket, and prices have been easing only very modestly recently. 
  
  
• We therefore expect CPI inflation to only gradually trend lower this year from its currently high levels.