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Peso Ticks Away From Record Lows, BSP's Medalla Adds Caveats To Hawkish Messaging

PHP

Spot USD/PHP operates -0.115 at PHP58.685, coming under pressure from lower U.S. Tsy yields/overnight greenback weakness. Familiar technical contours remain in play, with bears looking for losses past Oct 5 low of PHP58.395 and bulls keeping an eye on the PHP59.000 figure.

  • USD/PHP 1-month NDF last -0.010 at PHP58.760. Downside focus falls on Oct 5 low of PHP58.520, while bulls take aim at the record high of PHP59.460.
  • One-month option skews printed best levels in more than two years earlier this week and remain elevated, as option traders prepare for a potential attack at resistance from PHP59 and the PHP60 line in the sand outlined by FinSec Diokno.
  • BSP Gov Medalla calibrated his recent messaging, noting that while he does see the case for steeper monetary tightening, the central bank will not raise interest rates excessively just for the sole purpose of preventing the peso from breaking a certain level.
  • Offshore investors were net sellers of $4.90mn in Philippine stocks Tuesday. The PSEi ticked highs, extending gains this morning, as the index trades ~0.5% higher on the day.
  • Philippine September budget balance will cross the wires at the top of the hour.
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Spot USD/PHP operates -0.115 at PHP58.685, coming under pressure from lower U.S. Tsy yields/overnight greenback weakness. Familiar technical contours remain in play, with bears looking for losses past Oct 5 low of PHP58.395 and bulls keeping an eye on the PHP59.000 figure.

  • USD/PHP 1-month NDF last -0.010 at PHP58.760. Downside focus falls on Oct 5 low of PHP58.520, while bulls take aim at the record high of PHP59.460.
  • One-month option skews printed best levels in more than two years earlier this week and remain elevated, as option traders prepare for a potential attack at resistance from PHP59 and the PHP60 line in the sand outlined by FinSec Diokno.
  • BSP Gov Medalla calibrated his recent messaging, noting that while he does see the case for steeper monetary tightening, the central bank will not raise interest rates excessively just for the sole purpose of preventing the peso from breaking a certain level.
  • Offshore investors were net sellers of $4.90mn in Philippine stocks Tuesday. The PSEi ticked highs, extending gains this morning, as the index trades ~0.5% higher on the day.
  • Philippine September budget balance will cross the wires at the top of the hour.