PSEi takes cue from May inflation data

All eyes will be on the latest inflation data this week. This is so, especially since the figures would largely influence the Bangko Sentral ng Pilipinas’ (BSP) next policy stance.

Japhet Tantiangco, research head at Philstocks Financial Inc., said over the weekend investors would watch out for the May inflation print set to be released on Thursday.

An Inquirer poll of 13 economists yielded an average forecast of 1.3 percent. This marks a slowdown from the 1.4 percent recorded in April.

“A low inflation print, particularly one below the government’s 2 to 4-percent target, may boost market sentiment as this would imply that the BSP can continue with its policy easing,” Tantiangco said. The central bank’s next rate-setting meeting is scheduled this month.

“A lack of positive developments may continue to weigh on the market,” he added.

Last week, the benchmark Philippine Stock Exchange Index (PSEi) closed lower by 1.12 percent week-on-week to 6,341.

Stock trading platform 2TradeAsia.com pointed out that Moody’s lower sovereign credit rating on the United States had set the tone, resulting in the market’s decline.

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While US President Donald Trump’s move to delay a 50-percent import tariff on the European Union temporarily provided some optimism, trade uncertainty remained a key market mover.

A US trade court also attempted to block Trump’s reciprocal tariffs. However, the US Court of Appeals later reversed this and allowed the Trump administration to respond to the lower court’s decision.

This back-and-forth, along with inflation concerns, have “unsettled markets and led some companies to lower forecasts,” said Wendy Estacio-Cruz, research head at Unicapital Securities Inc.