Philippine stocks sank, while the peso fell to close at 58.42 against the US dollar Wednesday, despite latest overnight gains in most US markets on continued concerns over inflation and interest rates.
Philstocks Financial Inc. research analyst Claire Alviar said the investor sentiment was dampened by the latest Monetary Policy report which stated that the Bangko Sentral ng Pilipinas sees the local economy likely missing its 2024 and 2025 economic growth targets amid high interest rates. However, a forecast-beating read on consumer confidence in the world’s top economy dented hopes that the Federal Reserve will have room to cut borrowing costs this year, while the mood was also soured by a weak Treasury sale that saw yields push higher.
“The reading is still weak, being much closer to the bottom than the top of its past 10 years range. Nevertheless, this data point is the second successive upside surprises in the releases,” said Ray Attrill of National Australia Bank. His comments come after several other Fed officials said they were cautious about cutting too soon and wanted to see more data proving inflation was coming back down to two percent.Investors are now pricing in one cut before the year’s end — compared with as many as six tipped in January.
Oil prices rose again on geopolitical concerns after a bulk carrier was attacked in the Red Sea, a key waterway for shipping and particularly crude.