THE MORNING VIEW

THE MORNING VIEW


News Briefs
July 1, 2022
 
Local Key Events 
  • The Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla said that the BSP would consider larger key rate rises to sustain the peso in the face of rising inflation. Based on the increase in foot traffic at malls, consumer spending is anticipated to drive economic growth in the second quarter. 
  • Converge ICT Solutions, Inc. (PSE Ticker: CNVRG) opened its regional headquarters in Bicol to make its services more accessible in Southern Luzon. The Company expects to reach more than half of the addressable households in the area by the end of the year. 
 
Local Indices
  • Local equities continued to fall amid concerns on inflation, following the comments from Finance Secretary Benjamin Diokno that inflation could reach up to 6.5 % in June. The PSEi closed at 6,155.43 (-2.34% DoD).  
  • Local fixed income yields were mixed but fell on average on global recession worries. On average, yields fell by 1.35 bps, led by the belly of the curve which fell by 4.25 bps.
  • The Philippine peso strengthened on falling global oil prices and the new BSP chief's comments that the central bank may explore a more aggressive rate hike in the August meeting to contain growing inflation. The USD/PHP pair closed at 54.98 (-0.15% DoD). 

US and Europe Indices
  • US equities declined as investors digested mixed economic data releases. Consumer spending rose at 0.2% MoM in May, lower than the expectation of 0.4% and April's 0.9%. This is the weakest growth reported in five months. PCE core inflation also slowed down to 4.7% YoY, versus expectation of 4.8%. The S&P 500 closed at 3,785.38 (-0.88% DoD) and the DJIA closed at 30,775.43 (-0.82% DoD).
  • European equities fell as recession worries grew amid the hawkish stance of central banks to tame inflation. The MSCI Europe closed at 136.63 (-1.51% DoD).
  • US Treasury yields fell as investors digested the lower-than-expected core personal consumption expenditure index (PCE) which fell to 4.7% YoY in May from 4.9% reported in April. On average, the yields went down by 6.28 bps while the 2Y closed at 2.95% (-8.52 bps) and the 10Y at 3.01% (-7.62 bps).
  • The US Dollar weakened following a steady key inflation measure data. The PCE index for May held steady at 6.3% YoY, 30 bps lower than the 40-year-high of 6.6% recorded in March. The DXY closed at 104.69 (-0.40% DoD). 
 
Asia Pacific Indices
  • Asian equities were mostly mixed but ended downbeat as investors continue to worry over a possible recession but China’s stronger factory data cushioned the fall. The MSCI APxJ closed at 524.24 (-1.22% 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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