Overseas news
US stock indices mostly dipped on Monday while 10-year US Treasury yields reached 14-month highs. Gold prices also dropped as the US dollar reached an over-2-year high.
These happened as investors lowered their expectations on how soon the US Federal Reserve (the Fed) may start cutting interest rates this year. A strong jobs report dampened hopes of immediate rate cuts.
More available jobs and lower unemployment can point to a strong performance by companies. This hints at strong demand for products and services, which may lead to higher inflation rates.
The Fed may remain cautious about further rate cuts since lower interest rates can contribute to rising prices.
The key rate affects many financial matters both directly and indirectly, including loan rates, bond prices, and the stock market. That’s why any changes to it are of concern to investors.
Meanwhile, 6 European Union (EU) countries called on the European Commission to lower the $60-per-barrel price cap put on Russian oil by the Group of Seven (G7) countries.
G7 nations put a price cap on Russian oil as part of sanctions meant to lower the country’s revenue and curb the invasion of Ukraine.
Local developments
The benchmark Philippine Stock Exchange index (PSEi) sank to the 6,300 level on Monday, its lowest close in over 6 months.
This was influenced by the performance of US stock indices and the reduced likelihood of Fed rate cuts happening soon.
Meanwhile, the government-run Land Bank of the Philippines and Development Bank of the Philippines (DBP) are looking to offer bonds this year to raise funds.
Selling debt securities like bonds is 1 way that a public or private institution can raise money for its operations and projects. The 2 banks aim to use the proceeds for liquidity and daily banking needs.
The news isn’t very positive, but it may be wise to steer clear of big investing decisions for now. Waiting for clearer signals of change could be the right move at this time.
