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Overseas news
In the US, stock indices ended lower on Monday as investor sentiment fell. This came after US Federal Reserve (the Fed) Chair Jerome Powell hinted at potential interest rate cuts at the Jackson Hole symposium last Friday.
This symposium is an important event for analysts and investors, because it has traditionally been an opportunity for the Fed to reveal its view of monetary conditions ahead of its September meeting.
Further, US President Donald Trump said that he wants the government to make more investments in healthy US companies. This followed the US government’s $8.9 billion investment in chip manufacturer Intel.
Investing public funds in private companies can provide a big boost for these corporations, and it also shows confidence in their prospects. However, this step may also end up hampering investor sentiment and international sales.
Meanwhile, Japan’s core inflation was at 3.1% year-on-year in July, slower than the 3.3% inflation rate in June but still above the 2% government target.
Core inflation refers to the change in the prices of goods and services, excluding those from the food and energy sectors. It is intended to show the broad trend in price changes, and so doesn’t include prices that tend to be more volatile than others.
Local developments
Most analysts expect the Bangko Sentral ng Pilipinas (BSP) Monetary Board to reduce the target reverse repurchase (RRP) rate by 0.25% on its next meeting, which happens this week. This was according to a BusinessWorld poll.
If the analysts are correct, the benchmark rate would then be at 5%, lowering the cost of borrowing money.
Also, the Bureau of Customs says that the suspension of rice imports, which starts on September 1, may result in P4.3 billion in lost revenue from rice tariffs.
The 60-day suspension is due to efforts to protect local farmers from falling palay prices.
Without sure signs of changes happening soon, you may want to avoid big investing decisions for now while remaining updated on developments.
