Higher, Bucking Broader USD Trend, Monday Saw Largest Daily Net Equity Inflow Since 2021

USD/PHP has backed away from late July highs. Spot sits in the 54.70/75 region currently, +0.30% firmer in PHP terms so far today. This is impressive given broadly stronger USD trends elsewhere. Recent highs in spot USD/PHP come in around the 54.90 region, which is also close to the 20-day EMA. Mid July lows in the pair were back near 54.30.

• One factor potentially boosting the PHP today is carry over from yesterday's chunky +$270.1mn net equity inflow. This was the largest daily inflow going back to late 2021.
• Local equities are higher today, the PCOMP +0.50% and tracking higher for the first time in 4 sessions. Late yesterday the BSP stated July inflation likely eased further to between 4.1% to 4.9% (from the June pace of 5.4%). Note this data prints on August 4, this Friday (market consensus is +4.9% y/y).
• Local banks and builders have risen today in the equity space, seen benefiting from a further pull back in inflation pressures.
• The July PMI for the Philippines also printed earlier, rising to 51.9 from 50.9 in June. We remain comfortably below 2022 highs for the headline index, but no further deterioration will be welcome from a growth outlook perspective.