USD/PhP: 43.175 + 0.01 PSEi: 4216.35 - 16.93
USD/JPY: 81.23 PFINC: 939.48 - 9.78
EUR/USD: 1.4078 BDO: 60.00 - 0.05
GBP/USD: 1.6055 BPI: 56.00 - 0.20
PDSTF3M: 3.9288 MBT: 68.95 - 2.90
Prices as of 4:00pm Source: Bloomberg, Reuters
Philippine Interest Rate Outlook
Secondary market rates continued to trek downwards week-on-week as benign inflation environment supports investors’ expectations that monetary authorities will continue to keep its benchmark rates unchanged for the rest of the year the end.
Despite yields at historic lows, investors continue to snap government securities due to high market liquidity. On the budget side, the government remains on track to achieve their target deficit for the year.
Continue to expect market rates to remain on the low side until the end of the year.
Philippine Equities Outlook
Local shares lost 0.49 percent week-on-week to 4,216.35 due to profit-taking activities. However, optimism on the local market continues to be high as market participants expect better 3Q corporate results. Investors perceive any market pullback as an opportunity to buy equities as valuations remain relatively cheap against our Asian counter parts.
Chartwise, the week’s close at 4,216.35 suggests a minor consolidation is at play between the 4,200-4,240 levels. A break above the 4,250 levels will signal the test of the 4,300-4,350 levels. Immediate support and resistance is at at 4,150 and 4,250 levels respectively.
Philippine Peso Outlook
The local currency rose 0.60 percent week-on-week to 43.175 as the US dollar continued its decline against major currencies particularly the Euro. Portfolio flows continue to support peso appreciation as it tries to test new year lows.
Today's close at 43.175 points to a test of the 43.00 level. The recent pullback above the 43.50 is a mere technical rebound. Should 43.00 support levels hold, a pullback towards 43.50 - 43.70 is expected. Breach of 43.00 suggests test of 42.50 level.
Jonathan Ravelas
Chief Market Strategist
(632) 858-3145
Rhys Cruz
Junior Researcher
(632) 858-3001
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