Philippine stocks rebounded Tuesday as traders take position ahead of the release of the US November inflation data and the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas.
The Philippine Stock Exchange index climbed 64.10 points, or 1.03 percent, to close at 6,292.39, while the broader all-shares index added 25.81 points, or 0.78 percent, to finish at 3,353.46.
China Bank Capital managing director Juan Paolo Colet said the index surged near the market closing as investors await the release of US inflation data which could offer cues on future rate hike adjustments.
Colet said, however, that many investors were still opting to stay on the sidelines until they digested this week’s key economic events.
Value turnover was thin at P2.8 billion.
Meanwhile, Asian stocks rose Tuesday, following Wall Street’s lead as traders awaited a bumper round of market-moving events, starting with the release of US inflation data later today.
The consumer price index reading comes a day before the US Federal Reserve’s final policy meeting of the year, which will be closely followed by investors hoping for an idea about decision-makers’ plans for interest rates.
A string of data pointing to a slowdown in inflation and a softening of the labor market—but at a pace suggesting the economy will not tip into recession—has seen a surge in bets on the central bank cutting borrowing costs as much as four times in 2024.
“Investors sense they are nearing touchdown on the soft landing economic glide path, positioning for a benign inflation print or at least one that won’t upset the market’s bullish dynamics” ahead of the Fed meeting, said SPI Asset Management’s Stephen Innes.
As well as the CPI figures, traders are also awaiting the release of data on US producer prices, retail sales and manufacturing.
Fed officials including boss Jerome Powell have insisted for months that although inflation continues to come down they will still keep rates elevated for some time and be guided only by data.
“There’s so much to come over the next few days,” said Craig Erlam of OANDA.
“The Fed decision on Wednesday is unlikely to be controversial, but the forecasts, dot plot (of rate projections) and press conference that accompany it may well be.”
Wall Street traders provided a healthy lead, with all three main indexes closing higher, including the Dow ending at its highest level in two years.
The optimistic tone was also evident in Europe, where Frankfurt hit a record high and Paris finished not far from its own all-time peak.
The European Central Bank and Bank of England are also due to announce policy decisions this week.
In Asia, Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Mumbai, Singapore, Taipei and Jakarta were all in positive territory.
Charu Chanana, at Saxo Markets, said: “This could be a monumental week for Asian markets if US CPI data and the Fed re-confirm that the rate hike cycle has ended.”
The yen edged back against the dollar after tumbling Monday on reports that the Bank of Japan saw no immediate need to tighten monetary policy.
The currency has swung sharply over the past week after hitting a four-and-a-half-month high on comments from officials including governor Kazuo Ueda that were taken as hints they could end the long-running negative interest rates policy next week. With AFP