THE MORNING VIEW

THE MORNING VIEW


News Briefs
January 15, 2021
 
Local Key Events
  • Data from the Bangko Sentral ng Pilipinas showed that Overseas Filipino Workers’ cash remittances rose 0.3% year-on-year to $2.38bn. This was the slowest growth rate posted in three months. The mild easing may be attributed to the reimposition of lockdown restrictions in some host countries including the United Kingdom and Germany amid the surge in COVID-19 cases.
  • San Miguel Corp. (PSE Ticker: SMC), after completing Skyway Stage 3, will begin the construction of Pasig River Expressway (PAREX)  in February. PAREX spans across Pasig River, starting from Radial Road 10 in Manila to Circumferential Road 6 in Taguig. The expressway is expected to cut travel time to 10-15 minutes from the current 2 hours.
Local Indices
  • Local equities ended a two-day skid as the Philippine Food and Drug Administration granted emergency use authorization for Pfizer Inc’s COVID-19 vaccine. The vaccine has a 95% efficacy rate, but is required to be stored at -60 to -80 degrees celsius. The PSEi finished at 7,273.15 (0.42% DoD).
  • Local fixed income yields declined as investors remained cautious after the Philippines reported its first case of the UK virus strain. Moreover, this was also following the increase in COVID-19 cases domestically. On average, yields fell 0.84 bps DoD, led by the long-end which decreased 1.13 bps.
  • The Philippine peso was flat after a recent data release showed softer OFW remittances in November. Investors are also cautious due to the recent increase in COVID-19 infections locally. The USD/PHP pair closed at 48.070 (0.00%). 
US and Europe Indices
  • US equities slipped following the disappointing US labor data. The initial jobless claims rose to 965k reported on January 9 from 784k reported in the start of the year, this is the first time in almost 5 months that it reached near the 1 million level since August. The DJIA closed at 30,991.52 (-0.22% DoD) while the S&P 500 closed at 3,795.54 (-0.38% DoD).
  • European equities extended their gains amid positive sentiment on economic recovery following the news on the stimulus plan of President-elect Joe Biden. The increase was also supported by continued deployment of the vaccine for COVID-19. The MSCI Europe closed at 136.56 (+0.73% DoD).
  • US Treasury yields were mixed but rose on average as investors are optimistic on the probable boost in fiscal spending. President-elect Joe Biden proposed a USD2 trillion increase in fiscal spending to help the US economy recover from the impact of the pandemic. On average, US Treasury yields rose 1.84 bps DoD, with the 2Y ending at 0.139% (-0.4 bps) and the 10Y closing at 1.1292% (+4.6 bps).
  • The US Dollar mildly weakened as investors weighed expectations of higher fiscal spending under the Biden administration and the increase in US jobless claims data. Nonetheless, this was still held at a level above three-year lows. The DXY closed at 90.239 (-0.128%).
Asia Pacific Indices
  • Asian equities rose following China’s export boom which pushed the overall trade surplus to $78bn for December, bringing overall surplus for 2020 to a record high of $535bn (+27% YoY). This boosted market sentiment together with the expected Biden-led stimulus package. The MSCI APxJ closed at 701.61 (+0.40% 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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