Singapore’s consumer price index (CPI) rose 1.4% year on year in January, up from 1.2% in the previous month.
That means inflation increased by 0.2 percentage points versus the prior reading. No additional breakdown was provided.
Implications For Mas Policy
January’s rise in inflation to 1.4% year over year suggests that disinflation may be losing momentum. We have been positioned for a neutral Monetary Authority of Singapore (MAS) for weeks, but this print requires a rethink. The market is now starting to reduce expectations for any policy easing at the April 2026 meeting.
We see the clearest reaction in interest rate derivatives—specifically by selling 3-month SORA futures contracts. This position benefits if short-term rates move higher, which is a likely outcome if MAS turns more hawkish. We saw a similar move in 2025, when a surprise inflation print in Q3 triggered a sharp sell-off in these contracts.
This inflation reading also supports our bullish view on the Singapore Dollar, since MAS uses the exchange-rate band as its main policy tool. We are looking to buy SGD call options versus the USD, expecting the central bank to prefer a stronger currency to limit import-price pressures. During the 2022–2023 tightening cycle, SGD strengthened by more than 5% against the dollar as MAS adjusted its policy band five times in a row.
In equities, steady inflation and the risk of tighter policy are headwinds for the Straits Times Index (STI). Higher interest rates can weigh on corporate earnings and growth, which helped cap the index through much of 2025. We are considering buying put options on the STI as a hedge against a potential decline into the second quarter.
Equity Market Risk Considerations
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