.jpg)
Overseas news
In Japan, household spending increased by 1.3% in June compared to the previous year. This fell short of the expected 2.6% growth.
Household spending makes up a large part of a country’s gross domestic product (GDP) and so it’s an important indicator of an economy’s health. It’s also 1 of the factors that a central bank looks at when deciding what to do with interest rates.
US investment research firm MSCI has announced changes to its widely followed index that tracks the performance of global stock markets.
The MSCI All Country World Index (ACWI) will add 42 new securities and remove 56 securities effective August 26.
The MSCI ACWI covers about 3,000 stocks in developed and emerging markets. People can use it as a benchmark when assessing their global stock portfolio or invest in managed funds that mirror the performance of the index.
Local developments
The Philippine economy grew slightly faster in the 2nd quarter. The 5.5% annual growth in GDP is largely due to strong agricultural output and rising consumer spending.
The latest figure is only marginally higher that the 5.4% growth in Q1. The government set a target range of 5.5 to 6.5 percent GDP growth for 2025.
Relatedly, the improved local GDP and expectations of rate cuts by the US Federal Reserve (the Fed) helped boost the peso. It strengthened to P56.97 against the dollar on Thursday.
Lower interest rates tend to weaken a country’s currency as investors look for higher returns elsewhere.
Meanwhile, gross international reserves (GIR) slightly declined to $105.7 billion in July due to falling gold prices and increased foreign debt repayments.
GIR is defined as a country’s foreign exchange holdings, special drawing rights, reserve position in the IMF, and gold at the end of a given period, expressed as a US dollar value. The higher these reserves are, the more resilient and flexible that nation can be when the market is volatile.
The latest news shows little indication of the direction the markets will take in the short term. You can continue following your strategy if it still works for you.
