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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
ASIA
- As expected, Philippine central bank (BSP) kicked off tightening cycle earlier this morning by raising the overnight reverse repo rate by 25bps to 2.25% for the first time since 2018.
- We saw that CPI inflation broke above the 4% upper tolerance band in the past few months (April CPI came in at 4.9%) with policymakers revising the average 2022 inflation forecast to 4.6% (vs. 4.3%).
- We previously saw that inflationary pressures have started to accelerate in Asia/ SE Asia amid global supply chain disruptions (due to China lockdowns) combined with the Ukraine war shock.
- The BSP expects inflation to come back within its target range by the end of 2023 (3.9% average inflation forecast for 2023).
- BSP Governor Diokno said that the upward revision in inflation forecasts were partly driven by the emergence of additional factors such as the higher-than-expected adjustment in minimum wages in some regions.
- USDPHP continues to trade within a tight range, between 52.20 (50DMA) and 52.50. Support to watch below 52.20 stands at 52.
- More rate hikes are on the way in the coming meetings, with the policy rate expected to reach 3% by the end of the year.
- This move follows the recent Asia central banks’ hawkish response to the rise in inflationary pressures since the start of the year (RBI surprised market with a 40bps hike on May 4 and Malaysia also hiked its policy rate by 25bps on May 11).
- Thailand could also start to tighten on June 8th as inflation has surged above the BoT upper tolerance band.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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