The Weekly Review

Local equities inched up on optimism after S&P Global Ratings maintained the Philippines’ investment grade credit rating and issued a positive outlook despite lingering governance issues. 

Top performers were Ayala Corp. (PSE Ticker: AC; +8.45%), Converge Information and Communications Technology Solutions, Inc. (CNVRG; +7.73%), and Aboitiz Equity Ventures Inc (AEV; +7.71%). Meanwhile, Jollibee Foods Corp. (PSE Ticker: JFC; -5.41%), Universal Robina Corp. (URC; -5.97%), and Digiplus Interactive Corp. (PLUS; -9.43%) were the laggards of the week.

▲ The PSEi closed at 6,022.24 (+0.42% WoW). 

Local fixed income yields rose as investors weighed Bangko Sentral ng Pilipinas Governor Remolona's comment that a reserve requirement ratio cut is possible, though there is no urgency to do so.

▲ On average, yields rose by 2 bps, with the 2Y closing at 5.21% (+4 bps) and the 10Y closing at 5.94% (+4 bps).

The Philippine peso strengthened after S&P Global Ratings reaffirmed the country’s investment-grade credit rating and positive outlook. Investors also weighed growing bets for a December Fed rate cut.

▼ The USD/PHP pair closed at 58.65 (-0.36% WoW).

US equities jumped on increased expectations of a December Fed rate cut following dovish comments by Fed Governor Waller and San Francisco Fed President Daly, and the weaker-than-expected economic data in September. US retail sales grew by 0.2% MoM (Consensus: 0.4%), while US core producer price index (PPI) inflation came in softer at 0.1% MoM (Consensus: 0.2%).

▲ S&P 500 closed) at 6,849.09 (+3.73% WoW).

▲ DJIA closed at 47,716.42 (+3.18% WoW). 

US Treasury yields dropped amid stronger bets of a December Fed rate cut after the below-consensus September retail sales and core PPI inflation, as well as the dovish remarks from Fed Governor Waller and San Francisco Fed President Daly.

▼ On average, yields fell by 3 bps, with the 2Y closing at 3.49% (-2 bps) and the 10Y closing at 4.02% (-5 bps).

The US dollar weakened as dovish comments by Fed officials and weaker-than-expected economic data reinforced expectations for further monetary policy easing in December.

▼ The DXY closed at 99.46 (-0.72% WoW). 

Sources: BusinessWorld, Inquirer, Philippine Star, Manila Bulletin, Businessmirror, PSE Edge, Bloomberg, CNBC, Reuters, CNN, Wall Street Journal, Financial Times, Market Watch

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