DBS Group Research expects Singapore\u2019s inflation in March 2026 to rise to 1.6% year-on-year for core inflation and 1.8% year-on-year for headline inflation. This compares with 1.4% and 1.2% in February.<\/p>\n
The report links the rise to imported energy costs after the Middle East conflict. It refers to spikes in global crude oil, refined petroleum, and gas prices.<\/p>\n
Higher prices are expected in point-to-point transport services, air travel services due to airfare increases, and private transport. Price pressures in electricity and gas, and in food, are reported as contained for now.<\/p>\n
The article states it was produced with help from an artificial intelligence tool and reviewed by an editor.<\/p>\n
We see the March inflation numbers confirming the initial shock from energy prices, driven by the Middle East conflict. With Brent crude having averaged over $98 a barrel last month, a significant jump from February levels, this upward trend was anticipated. These figures now form the baseline for our forward-looking strategies as we assess how persistent these pressures will be.<\/p>\n
Given this inflationary environment, we anticipate the Monetary Authority of Singapore (MAS) may adopt a more hawkish stance in its next policy review. This makes positioning for higher short-term interest rates a viable strategy. Traders should consider looking at SORA futures, as the market will likely begin pricing in a steeper appreciation of the S$NEER policy band.<\/p>\n
This leads directly to opportunities in currency derivatives, as the Singapore Dollar is the primary tool for monetary policy. A tightening bias typically strengthens the SGD against its trading partners. Looking back at the MAS tightening cycle in 2022, we saw the SGD gain considerable ground, so buying call options on the SGD against the USD could offer favorable risk-reward.<\/p>\n
The root cause of this inflation remains the energy market, where uncertainty continues to loom. As long as geopolitical tensions persist, the risk of further supply disruptions remains high, suggesting continued price volatility. We believe buying call options on Brent crude futures for the coming months is a prudent way to gain exposure to potential upside price spikes while defining downside risk.<\/p>\n
On the equity front, these conditions create a divergence in sector performance. Higher fuel costs and potential interest rate hikes could negatively impact transport stocks like Singapore Airlines and interest-rate-sensitive sectors such as REITs. Consequently, we are looking at buying put options on these sectors, while also considering long positions in local energy companies that may benefit.<\/p>\n
Overall market uncertainty is elevated, which suggests volatility itself is a tradable asset. The current environment is ripe for strategies that profit from large market swings, regardless of direction. We are therefore considering using options on the Straits Times Index, such as straddles, to capitalize on the potential for increased market movement in the weeks ahead.<\/p>\n","protected":false},"excerpt":{"rendered":"
DBS expects March 2026 core inflation at 1.6% and headline 1.8%, driven by energy-linked transport costs.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45304","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45304","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45304"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45304\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45304"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45304"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45304"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}