All eyes on monetary policy
The local bourse may be in for a challenging week as investors brace for monetary policy developments here and in the United States.
Rastine Mercado, research director at Chinabank Securities, said volatility may be especially high on Tuesday as investors react to US Federal Reserve Chair Jerome Powell’s speech that could tip the rate-setting scales.
“If Powell signals readiness to cut rates at their September meeting, then we think that the PSEi (Philippine Stock Exchange Index) could ultimately push higher,” Mercado said in an email.
The Bangko Sentral ng Pilipinas (BSP) is set to announce on Thursday its latest monetary policy stance, although analysts are seeing a possible 25-basis-point rate cut to 5 percent.
Last week was particularly sluggish for the benchmark PSEi as traders struggled to gain footing in a lethargic market.
Without the right catalyst and any exciting development, the index closed last week down by 0.54 percent to 6,281.
Mercado expects the PSEi to push as high as 6,400 this week, although hawkish pronouncements could cause a slip toward the 6,200 psychological support level.
For trading platform 2TradeAsia.com, strong first-semester earnings of banks and consumer-focused companies have been keeping the index afloat.
Still, it noted that global trade uncertainties have forced markets to “teeter between optimism and caution, a delicate dance where missteps could spark volatility.”
“Strategies are tilted to anchor portfolios in defensive havens, while selectively leaning into energy and commodity cyclicals to ride potential supply chain disruptions,” 2TradeAsia said.
