Investors jittery over fed stance
Less optimistic prospects at Wall Street will likely spill over this week to global markets, including the Philippines, as the world watches out for the US Federal Reserve’s next move.
As it is, the minutes of the Fed’s December meeting already spooked investors last week.
With the American central bank signaling “significantly increased upside risks” this year, traders at home took it as a cue to shed shares, according to stock trading platform 2TradeAsia.com.
The benchmark Philippine Stock Exchange Index (PSEi) ended last week lower by 1.63 percent to 6,496.32, erasing gains recorded in the first three trading days of the year.
“Without mentioning the return of [US President Donald] Trump at the helm, the Fed cited significantly increased upside risks to the inflation outlook borne from changes in trade and immigration policy,” 2TradeAsia said in an advisory over the weekend.
From four rate cuts previously planned, experts were now penciling in only two cuts this year, it said.
Historically, the Bangko Sentral ng Pilipinas tends to follow the Fed’s monetary policy stance.
“With no sight of a sweeping tide that could rouse the local market, at least in the very short term, brace for volatile trading sessions that have yet to decouple from the Trump-interest rate-inflation news cycle,” 2TradeAsia said.
Still, it noted that inflation expectations were less risky in the Philippines, and this could help support local equities and shield the PSEi from global anxiety.
