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Overseas news
In the US, stocks traded cautiously on Monday, with the S&P 500 and Nasdaq approaching fresh record closes. This came as investors paused ahead of a packed week of earnings, economic data, the rate decision of the US Federal Reserve (the Fed), and the ongoing Middle East situation.
The S&P 500 and Nasdaq are 2 of the largest and most significant stock indices in the US. Their movements typically reflect investor sentiment and expectations in the US stock markets.
Meanwhile, a survey of the European Central Bank (ECB) shows euro zone firms expect a short-term inflation spike due to higher energy prices. However, forecasts for longer-term inflation remain stable and wage growth is seen to ease.
Elevated inflation often causes higher operating costs for businesses, which may mean narrower profit margins especially for firms who are not always able to pass on these costs to consumers.
Further, a Reuters poll suggests that the Bank of England is widely expected to keep rates unchanged this week as it assesses the economic fallout from the Iran conflict, with investors betting on rate hikes later this year.
The approach of central banks towards key rate hikes depends on the economic conditions in their respective nations. It isn’t odd to see 1 central bank continue raising rates while another implements a pause, depending on their key economic variables such as inflation.
Local developments
Philippine oil firms are rolling back diesel and kerosene prices for a 3rd straight week, reflecting recent market calculations, while gasoline prices are seen edging slightly higher.
In addition, the peso weakened to a near 1-month low of P60.71 per dollar as fading hopes for a US-Iran peace deal pushed oil prices higher. This affects both market sentiment and the local currency.
The conflict in the Middle East and its effect on the supply and prices of oil around the world continues to impact many countries in different ways, including their respective economy.
Oil prices may continue to be unstable due to the conflict. For now, avoiding big changes to your investments and continuing your strategy might be the right decision for you.
