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Overseas news
In the US, Wall Street indices ended higher on Monday. This came as investors started reacting to potentially high chances for a US rate cut next month.
Changes in the key rate can affect the stock market. Since lower interest makes debt instruments like Treasuries less profitable, demand for stocks may go up if the rates decrease. The reverse may happen when key rates rise.
Globally, Monday also saw oil prices rising around 1%. This happened as uncertainty mounts over a potential peace deal between Russia and Ukraine, which would help boost the former’s oil exports.
Russia is the world’s second-largest oil exporter, but shipments have faced international sanctions due to the Russia-Ukraine situation.
Local developments
Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr. said on Monday that the BSP is considering reducing interest rates to spur demand amid low consumer confidence.
Further, the Philippine Stock Exchange Index (PSEi) ended above the 6,000 level for the first time in over a month. This happened as sentiment rose over expectations of further easing by the BSP.
Lower interest rates make it cheaper for institutions and individuals to borrow money. This may encourage them to expand their business, which in turn may help boost the economy.
Meanwhile, the BSP also plans to keep using a range for its inflation target, specifically 2%-4%. This would allow the central bank to maintain a flexible inflation-targeting framework.
While the news is mostly positive, there aren’t any hints that the general market is about to start moving significantly in either direction. For now, you may want to continue following your strategy if it has still been working for you.
