Malaysia: August CPI comes in a notch above expectations

After declining for two consecutive months to 1.8%oya in July, Malaysia's August inflation surprised slightly to the upside. Headline inflation picked back up a tenth to 1.9%oya (J.P. Morgan and consensus: 1.8%oya), but the BNM's preferred gauge of core prices slipped further to 1.7%oya—a 20-month low. In sequential terms, headline prices rose 0.3%m/m, sa following three straight months of flat readings, while core prices rose 0.2%. But the 3m/3m momentum in headline inflation still eased to 1.1%ar, while the momentum in core inflation fell further still to 0.7%ar, pointing to still-contained price pressures. Food price momentum normalized further from earlier subdued levels, with food prices up another 0.3% last month and 3m/3m momentum rising from 2.2%ar to 2.6%ar. Energy prices also rose slightly (+0.3%m/m, sa) as fuel and electricity prices ticked higher, but Middle East conflict-induced energy inflation continues to be largely absorbed by petrol, diesel and electricity subsidies;