Narrow range trading seen this week | Inquirer Business
STOCK MARKET

Narrow range trading seen this week

/ 02:05 AM June 13, 2023

MANILA  -The Philippine Stock Exchange index (PSEi) will trade in a narrow range as investors place bets ahead of the next US Federal Reserve policy meeting on Wednesday.

The PSEi shed 0.90 percent to 6,507.15 the past week despite government data showing headline inflation slowing in May to 6.1 percent, which was within expectations.

ADVERTISEMENT

Juan Paolo Colet, managing director at Sy-led investment bank China Bank Capital Corp., sees the PSEi staying within a tight 6,400 to 6,600 range.

“Market movement this shortened trading week will be driven predominantly by US news, particularly May inflation data and the Federal Reserve’s policy rate decision,” Colet said.

FEATURED STORIES

“Many analysts are expecting a US rate hike pause this month, but it is the Fed’s interest rate outlook that will be most keenly watched. Any hawkishness will weigh down on our market, so traders are hoping for a dovish tone,” he added.

Investors will also be monitoring domestic data on overseas remittances for the month of April, he said.

BSP’s policy

Last week, the Bangko Sentral ng Pilipinas (BSP) announced a cut in the reserve requirement ratio of banks but signaled this did not mean a shift in its monetary policy stance and that cooling inflation remains a priority.

BSP cuts banks’ reserve requirements starting June 30

HSBC Global Research Asean economist Aris Dacanay expects the BSP to maintain its interest rate outlook after the recent inflation print.

“The BSP will likely keep its policy rate at 6.25 percent, not only in the upcoming monetary board meeting (22 June 2023), but even in the many meetings after.

Our baseline view is for the BSP to be on hold until the second half of 2024,” he said in a research note.

ADVERTISEMENT

After pause in rate hikes, BSP to mimic US Fed

“The BSP will likely follow the Fed by cutting the policy rate only after the Fed cuts its own,” he added. “Our baseline view is for the Fed to only begin cutting rates in [the second quarter] 2024.” INQ

Asia shares near month high ahead of central bank meetings

Your subscription could not be saved. Please try again.
Your subscription has been successful.

Subscribe to our daily newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, Interest rates‎, PSEi, Stock Market, US Federal Reserve
For feedback, complaints, or inquiries, contact us.
Your subscription could not be saved. Please try again.
Your subscription has been successful.

Curated business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.



© Copyright 1997-2023 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.