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Overseas news
In the US, major stock indices and government bonds steadied on Monday. This happened as traders weighed the Trump administration’s move to open a criminal investigation into Jerome Powell, head of the US Federal Reserve (the Fed).
Further, concerns on the Fed’s independence weakened the dollar and boosted gold.
The Fed sets the US monetary policy, which can affect borrowing costs and inflation levels. Its decisions also tend to influence other central banks and financial markets globally, and so its independence can be a cause for concern among many investors.
Meanwhile, India’s retail inflation rate quickened to 1.33% in December, marking the fastest growth in 3 months. This is largely due to a slower decline in food costs, with prices seen to continue rising this year.
Retail inflation is another term for changes in the Consumer Price Index (CPI), which is a “basket” of goods and services that a typical family consumes in a given period.
Local developments
The Philippine Stock Exchange Index (PSEi) rose to the 6,400 level on Monday, hitting a near 6-month high. The increase was fueled by expectations of a rate cut by the Bangko Sentral ng Pilipinas (BSP) next month.
Lower interest rates may lead to many developments, including increased borrowing, more money circulating in the system, and renewed investor interest in stocks.
Additionally, Meralco’s overall electricity rate declined to P12.9508 per kilowatt-hour (kWh) in January from P13.1145 in December.
Reduced electricity rates can help ease costs for both households and businesses. The latter can then affect the inflation rate.
Meanwhile, the Department of Agriculture (DA) approved a plan to export 100,000 metric tons of raw sugar to the US.
The move is aimed at easing excess domestic supply and boosting farmgate prices, which is the price received by farmers for the sale of their produce.
Developments in the US may prompt you to adopt a wait-and-see approach. It may also be ideal to maintain your strategy for now as you keep an eye on further changes.
