THE MORNING VIEW

THE MORNING VIEW


News Briefs
January 21, 2022
 
Local Key Event
  • Moody’s Analytics downgraded the forecasted GDP growth rate in 2022 from 6.4% to 5.6%, citing the impact of Omicron surge to economic activity, decreased mobility, and relatively low vaccination rate.  
  • Union Bank of the Philippines (PSE Ticker: UBP) plans to launch cryptocurrency trading and custodial services. UBP will use systems developed by METACO, a Switzerland-based company to manage its digital assets platform. The company will also employ IBM Cloud services to maximize confidential computing capabilities of IBM integrated with METACO's systems. 
Local Indices
  • Local equities fell despite positive sentiment on China’s move to cut its interest rate amid concerns on inflation as oil prices continued to increase. The PSEi finished at 7,239.28 (-0.31% DoD). 
  • Local fixed income yields  were mixed amid continued rate hike woes and inflation concerns. On average, yields went up by 0.94 bps, led by the belly of the curve which rose by 2.72 bps. 
  • Philippine peso strengthened as investors digested the decision of China’s central bank to cut its benchmark lending rate amid concerns of an economic slowdown. Gains were tempered by expectations of looming rate hikes from the US Fed. The USD/PHP pair closed at 51.34 (-0.31% DoD). 
US and Europe Indices
  • US equities declined amid continued sell-off following worries on rising interest rates and oil prices. The DJIA closed at 34,715.39 (-0.89% DoD) while the S&P 500 closed at 4,482.73 (-1.10% DoD). 
  • European equities closed slightly higher with gains being led by travel stocks, as investors digested a new batch of corporate earnings releases. The MSCI Europe closed at 160.97 (+0.49% DoD). 
  • US Treasury yields fell amid negative sentiment following the report on initial jobless claims which increased by 55,000 to 286,000 for the week ended January 15 amid the Omicron variant’s surge. On average, yields went down by 3.77 bps with the 2Y at 1.02% (-3.23 bps DoD) and the 10Y at 1.80% (-6.06 bps DoD).
  • The US Dollar mildly strengthened amid lingering expectations of rate hikes from the US Fed. Investors also digested disappointing data which showed that US initial jobless claims increased. The DXY closed at 95.74 (+0.24% DoD).
Asia Pacific Indices
  • Asian equities gained amid risk-on sentiment as investors digested the decision of the China’s central bank to ease the one-year prime loan rate by 10 basis points from 3.8% to 3.7%. The five-year prime loan rate was also reduced by 5 basis points to 4.6% from 4.65%, marking its first cut since April 2020. The MSCI APxJ closed at 637.34 (+1.32% DoD). 
Sources: BPI, Business World, PDI, Phil Star, Manila Bulletin, Reuters, Briefing, Bloomberg, CNN, Dow Jones, The Wall Street Journal, CNBC , Market Watch
 

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