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Overseas news
The inflation rate in the US reached 2.7% in November, lower than the 3.1% figure analysts expected. This was according to the Bureau of Labor Statistics (BLS).
Meanwhile, the Bank of England (BoE) lowered its policy rate on Thursday from 4% to 3.75% following a narrow vote. However, the central bank signaled it may be cautious about further rate cuts going into next year.
Manageable inflation can give a central bank room to cut interest rates or keep them low. The key rate matters to investors since it influences loan and deposit rates, bond yields, and even the performance of other asset classes such as stocks.
Relatedly, gold prices fell on Thursday as demand for the safe haven asset dropped following the release of US inflation data.
Gold is generally more attractive during periods of high inflation and increased uncertainty. Demand for this asset tends to drop when investors are willing to take more risk.
Local developments
New vehicle sales fell by 8.7% year-on-year in November due to a large drop in passenger car sales. This was shown in a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).
Vehicle sales figures can hint at an economy’s health. Sales tend to pick up when things are good, and consumers and businesses are more inclined to spend. The opposite may happen when the situation isn’t as positive.
Additionally, the Congress is set to ratify and submit the 2026 budget bill for signing by December 29. The reconciled version includes a trimmed budget for the Department of Public Works and Highways (DPWH).
Lower infrastructure spending can have direct and indirect effects on the economy. It can influence job creation and growth in industries and locations affected by the developments.
The reallocated budget, however, may support developments in areas other than infrastructure, such as education and agriculture.
The cooling US inflation and PH spending bill may have a bigger impact over time, but changes might not be seen right away. For now, you may want to hold off on making big investing decisions as you wait for clearer signals.
