Philippines stocks are likely to rise slightly as markets reopened Friday, with investors taking a third tax cut next week in the annual gathering by Fed Chairman Jerome H. Powell and a Bangkok Sentral Ng Pilipinas (BSP) policy meeting next week.
On Wednesday, the Philippine Stock Exchange Index (PSEI) rose 0.20 points to close 6,277.87, while the widespread all-stock index fell 0.07% or 2.76 points to end with a score of 3,735.14. The Ninoy Aquino Memorial Day holiday closed the market on Thursday.
First, the head of Metro Investment Corp. Cristina S. Ulang said in a Viber message: “Due to the oversale market, there may be a static technical correction by next week.”
The PSEI has been moving sideways over the past few days, and has been at the 6,200 level due to the lack of fresh catalysts at the Fed’s annual Jackson Hall seminar.
Michael Licafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message that Mr. Powell is scheduled to speak at Friday’s gathering on Friday, with markets monitoring potential hints about the direction of monetary policy in the world’s largest economy, due to expectations of the Fed’s cuts next month.
Since December 2024, the Fed has kept its target rate within the range of 4.25%-4.5%.
Traders have stepped up their bets after a surprising pay report earlier this month and were encouraged after consumer price data showed limited up-and-down pressure on tariffs, Reuters reported. However, last week’s price readings for producers were more than expected, complicating the policy situation.
Minutes from the start of the Fed’s July party, when policymakers voted to keep interest rates stable, suggesting Fed Vice Chairman Michelle Bowman and Gov. Christopher Waller alone push for tax cuts.
This caused traders to lower odds to 80% as the Fed rate dropped by a quarter of a point on September 17, down from 84% 24 hours ago. Currently, they are priced at a total of 53 basis points for the rest of the year.
Mr Ricafort said another major catalyst for the market was the BSP’s policy meeting on August 28, and the market is expected to reduce 25 base points for the third time in a row.
He added that this will “reduce borrowing costs, which will help stimulate more credit demand, which in turn stimulates more economic activity and growth in overall GDP (gross domestic product).
Mr. Ricafort sets the immediate support for PSEI at 6,204.04, while the immediate primary resistance is 6,370.
BSP Governor Eli M. Remolona, Jr. It is said last week that a lower tax rate is likely to be “very likely” at next week’s Monetary Commission meeting.
Mr Remolona added that they can only lower the benchmark interest rate twice for the rest of the year, including a possible move on August 28, as they expect inflation to remain within the target range of 2-4%. – RMD Ochave and Reuters
