HK CPI To Be Driven More By Rent, Transport

Forex News Hong Kong June CPI pushed up by higher rents, energy and transport inflation, says Credit Suisse; June CPI +6.1% on-year vs May's +5.7%. Expects introduction of additional public housing rent waivers to distort year's average CPI downward by another 0.4 percentage point in 2008; says, "We expect Hong Kong's inflation to be increasingly driven by higher rents and transportation fares." Although food inflation in China may slowly moderate, may be offset by stronger CNY/HKD. Also, CPI private housing rent index expected to keep rising while higher energy prices, weakening USD expected to push fuel prices higher, thinks pass-through of higher fuel prices on public transportation underway.