THE MORNING VIEW
June 23, 2017
Local stocks ended lower despite net foreign inflows of USD 13.38m, following overnight losses in US markets on the back of a continuing slump in oil prices. The PSEi lost 0.355% to 7.858.34, led by losses in the property (-0.82%) and industrial (-0.61%) sectors.
In the local fixed income market, the yield curve steepened ahead of the BSP meeting. On average, yields rose 2.03 bps, with short-term yields gaining 18.99 bps as investor preference shifted to the belly (yield -9.38 bps) and long end of the curve (yield -1.58 bps).
The Philippine peso weakened for a sixth straight day ahead of the BSP rate decision, hitting three-month lows. The USD/PHP gained 0.11% to 50.345.
US and Europe
US equity markets ended lower despite a rally in the healthcare sector (+1.4%), which was buoyed by the release of a draft of the Republican-led replacement for the US Affordable Care Act (Obamacare). The S&P 500 ended at 2,434.50 (-0.05% DoD), with consumer staples (-0.7%) and financials (-0.6%) leading the decline. The DJIA lost 0.06%, ending at 21,397.29.
European stocks closed slightly higher after a volatile trading session, as gains in oil saw the oil and gas sector trimming losses toward the end of the trading day. The MSCI Europe closed at 131.17 (+0.01 DoD).
US Treasury yields slumped as initial jobless claims rose to 241k (estimate: 240k). On average, yields fell 1.77 bps. The 10-year yield ended at 2.148% (-1.57 bps) while the 2-year yield was down to 1.34% (-0.8 bps).
The US dollar strengthened marginally after the Conference Board's leading economic index rose 0.3%, matching estimates for May. The DXY rose 0.03% to 97.593.
Asian equities trended higher in light of a day-on-day pick up in oil prices after three consecutive declines. WTI and Brent were up 0.49% and 0.89%, respectively. The MSCI APxJ ended at 503.80 (0.36% DoD).
Sources: BPI, Business World, PDI, Phil Star, Manila Bulletin, Reuters, Briefing, Bloomberg, CNN, Dow Jones, The Wall Street Journal, CNBC
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