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PSEi, peso slip ahead of US inflation data, Fed minutes

By Joann Villanueva

April 12, 2023, 7:28 pm

<p><strong>CORRECTION</strong>. Wait-and-see stance for the release of the United States' March 2023 consumer price index (CPI) resulted in the negative close of the Philippine Stock Exchange index (PSEi) on Wednesday (April 12, 2023). The peso ended weaker against the US dollar due also to correction with a boost from higher remittances from overseas Filipino workers (OFWs) during the Holy Week holiday. <em>(PNA graphics)</em></p>

CORRECTION. Wait-and-see stance for the release of the United States' March 2023 consumer price index (CPI) resulted in the negative close of the Philippine Stock Exchange index (PSEi) on Wednesday (April 12, 2023). The peso ended weaker against the US dollar due also to correction with a boost from higher remittances from overseas Filipino workers (OFWs) during the Holy Week holiday. (PNA graphics)

MANILA – Risk-off sentiments resulted in the negative close of both the local bourse’s main index and the peso on Wednesday.

The Philippine Stock Exchange index (PSEi) ended the day’s trade at 6,469.42 points, down by 0.16 percent or 10.21 points.

All Shares slipped by 0.13 percent, or 4.59 points, to 3,475.27 points.

Half of the sectoral gauges also finished the day in the negative territory, led by Holding Firms index after it went down by 0.62 percent.

It was followed by Property, 0.49 percent, and Industrial, 0.16 percent.

Mining and Oil rose by 1.90 percent, Financials by 0.40 percent and Services by 0.19 percent.

Volume reached a little over a billion shares amounting to PHP7.22 billion.

Advancers equaled decliners at 88, while 57 shares were unchanged.

“Philippine shares ended trading muted as investors shifted their focus to March’s high anticipated inflation report with the S&P500 closing relatively flat, while the DJIA (Dow Jones Industrial Average) rose by 0.29 percent and the Nasdaq lost 0.43 percent,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.

Limlingan said the March 2023 consumer price index (CPI) report in the US “is a key data point that could highly influence the Fed’s (Federal Reserve) rate decision come May.”

Citing a report by Dow Jones, he said economists surveyed by Dow Jones forecast a 0.2 percent rise in March CPI, slower than the 0.4 percent increase in the previous month.

Limlingan said minutes of the March 2023 policy meeting of the Fed will be out within the day “and slated to offer further clues into the mindset behind the central bank’s 25 basis point hike in the wake of SVB’ (Silicon Valley Bank) collapse and the turmoil that rattled the broader banking sector.”

Oil prices went up in the international market, with the Brent crude futures rising by 2.1 percent to USD85.57 per barrel, and the West Texas Intermediate (WTI) by 2.1 percent to USD 81.48 per barrel “following the prospects of the Fed easing the rate hikes after the release of the inflation data today.”

Meanwhile, the local currency weakened against the US dollar after ending the day’s trade at 55.22 from the previous day’s 54.93 close.

It started Wednesday at 55.05, a depreciation from its 54.6 opening in the previous session.

It traded between 55.24 and 55.00, resulting in an average of 55.101.

Volume went down to USD935.98 million from the previous session’s USD1.14 billion.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso corrected against the United States dollar after its seasonal increase during the Holy Week holiday.

He said investors also turned their focus on the release of US’ March 2023 CPI and its impact on the Fed’s policy rate decision.

For Thursday, Ricafort forecasts the peso to trade between 55.10-55.30 against the US dollar. (PNA)

 

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