OCTA Research Group Raises Alarm As Delta Variant Spreads

Spot USD/PHP tested its recent cycle high this morning, but eased off thereafter, despite concern about the Covid-19 situation in the Philippine capital region. The rate last sits -0.039 at PHP50.374. Bears look for further losses past Jul 23 low of PHP50.085, towards Jul 13 low of PHP49.940. Conversely, a clean break above Jul 19 high of PHP50.496 would allow bulls to take aim at May 28/22 highs of PHP50.770/50.795.

• USD/PHP 1-month NDF last seen -0.130 at PHP50.570, with bears looking for a dip through Jul 22/13 lows of PHP50.140/50.100. On the flip side, bullish focus falls on Jul 19 high of PHP51.390.
• OCTA Research Group called for "anticipatory, preventive and circuit-breaking lockdowns" and said that Metro Manila is "officially in a surge." An OCTA fellow told a government briefing that the reproduction rate (so called R0 or the average number of people infected by each positive case) in Metro Manila is now at 1.33 vs. 0.60 last month amid the spread of the Delta variant.
• Philippine overall BoP deficit shrank to $312mn in June from $1.397bn prior. The YtD BoP deficit printed at $1.94bn vs. $4.11bn a year ago.
• Philippine bank lending data may hit the wires over the coming days, but there is no fixed time of the release.