Taiwan price pressures rising

Taiwan CPI inflation is bottoming out. Without the negative base effects from oil prices, headline CPI is expected to turn positive in Q4 and strengthen to nearly 2% in H1 2016. 

Core CPI inflation is also expected to stop falling and gain upward momentum in H2, since the downside drag from cheaper import prices should ease given smaller appreciation pressures in the TWD.

"Given the underlying strength in growth and inflation, the central bank is unlikely to cut its policy rate in the current cycle", says Societe Generale.