Surging Oil Prices To Keep Central Banks Wary

Oil prices declined for a second consecutive day today as profit-taking saw Brent crude fall below US$87/bbl, but despite this short-term retreat ahead of today's Fed meeting, there is little to suggest that the steep upward trend is set to take a lengthy pause. We have set an upside target of US$100/bbl, and with this in mind, we reiterate our view that Asian central banks are likely to maintain vigilance in the face of mounting inflationary pressures, despite headline inflation currently remaining well under control in most of the region.

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