Hong Kong's inflation was likely steady in May

Hong Kong will release May CPI data on 22 June. Headline CPI inflation of 2.9% y/y is expected, marginally higher than 2.8% in April. The housing component likely continued to be supported by stubbornly high rental prices, offsetting the lagged impact of lower oil prices. 

Services prices also likely remained strong on a still-tight labour market; the jobless rate has hovered around 3.2% since mid-2014, close to its lowest in 17 years.  

"We expect Upside risk in H2-2015 and full-year inflation of 3.5% on increasing rental prices and the rebound in food prices",Said Standard Chartered in a report on Friday.