Peso Shrugs Off Expectation Beating Inflation Print

Spot USD/PHP sank after the re-open, playing catch up with the overnight FOMC monetary policy decision. The rate remains at depressed levels, last -0.193 at PHP52.303, despite a firm beat in the latest batch of local inflation data. Bears look for a slide through the 50-DMA/Apr 28 low at PHP52.006/51.970. Meanwhile, the nearby PHP52.500 level remains the key bullish target.

• USD/PHP 1-month NDF last seen +0.020 at PHP52.580. Topside focus falls on May 3 high of PHP53.240, while bears keep an eye on the 50-DMA at PHP52.253.
• Consumer price growth in the Philippines accelerated more than forecast, reaching +4.9% Y/Y in April, beating BBG consensus forecast of +4.6%. Headline inflation has thus officially breached the BSP's target range (+2.0%-4.0% Y/Y) after printing at its upper end in March.
• BSP Gov Diokno noted that supply disruptions are accentuating inflationary pressures and warrant "closer monitoring to enable timely intervention in order to arrest potential second-round effects."
• Looking ahead, the Philippines Statistics Authority will publish unemployment and trade data on Friday.