Peso Gains, Philippine Inflation Unexpectedly Slows

Philippine headline CPI inflation unexpectedly slowed to +4.6% Y/Y in October from a three-year high of +4.8% recorded in September. The print missed consensus estimate of +4.9% and fell close to the lower bound of the forecast range. The Philippines Statistics Authority said that the deceleration in overall price growth was mainly driven by slower food and beverage price inflation.

• Bangko Sentral ng Pilipinas is reviewing their assessment of the the price environment ahead of their next monetary policy meeting, slated for later this month, according to Governor Diokno. The official noted that supply-side pressures are best addressed by non-monetary interventions, but the central bank "stands ready" to maintain loose monetary stance for as long a needed.
• Elsewhere, Philippine trade deficit widened to $3.996bn in September from $3.509bn in August, as imports grew faster than forecast.
• The Alert Level in Metro Manila drops by one notch to Level 2 from today. OCTA Research Group noted that the capital region has already reversed a surge in Covid-19 infections driven by the Delta variant.
• Spot USD/PHP trades -0.055 at PHP50.560 at typing. A dip through the 50-DMA/Oct 29 low at PHP50.435/50.360 would turn focus to the 100-DMA at PHP50.111. Meanwhile, the initial layer of resistance is located at PHP50.907, which represents Oct 22 high. Above there opens round figure/Sep 27 high of PHP51.000/51.036.
• USD/PHP 1-month NDF unch. at PHP50.760 at typing. Losses past the 100-DMA/Nov 1 low at PHP50.331/50.200 would please bears, while bulls look to a move through Nov 3 & 4 highs of PHP50.920.
• The main highlight in the Philippines next week is the release of Q3 GDP figures on Tuesday.