The US dollar strengthened after first quarter US Gross Domestic Product (GDP) figures beat estimates at 1.3% vs a 1.1% consensus expectation. Personal Consumption Expenditures or PCE, which are used as a gauge for inflation, rose 5% (against a 4.90% estimate).
US weekly jobless claims figures also came out lower than expected at 229,000 vs 250,000 estimates, further fueling the climb in US yields. Futures are showing anticipation of a potential rate hike by the US Federal Reserve (the Fed) in June.
Economic factors such as GDP, PCE, and labor conditions may have an effect on the inflation rate, while efforts to manage high inflation affect many types of investments to some degree.
US President Joe Biden and House Speaker Kevin McCarthy are nearing a deal on cutting spending and raising the government’s debt ceiling of $31.4 trillion, with the parties just $70 billion apart on discretionary spending.
The ongoing situation regarding the debt ceiling has many investors wary. If an agreement isn’t reached in time, it could have a huge effect on the economy and financial markets.
Foreign portfolio investments (FPI) in the Philippines yielded a net outflow of $352 million in April 2023, a reversal from the $1.41 billion net inflow in the same period last year. This happened amid worries over high inflation and interest rates.
FPI is commonly referred to as “hot money” due to the ease by which it can enter and leave a country. An outflow is when money goes out, and an inflow is the opposite.
Infrastructure spending in the Philippines fell by 16.5% year-on-year in March 2023, as some releases for the Defense and Education departments are still set for the 2nd and 3rd quarters.
While infrastructure is meant to help the public in some way, its creation can also benefit the country through jobs creation and additional spending.
The US debt ceiling situation can be worrisome for investors, given its potential impact. The local news may also be a little concerning. With that, waiting for updates may be the right thing to do.