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PHP Underperforms, Despite Improving Trade Deficit


USD/PHP is tracking higher again today, the pair up a further 0.30% to be last above 55.80. The pair dipped briefly below 55.20 during the start of last Friday's session, so this is somewhat of a turnaround. Resistance may be evident between 56.00 and 56.50 if seen, while on the downside note the simple 200-day MA comes in at 55.00.

  • Earlier, we had better than expected October trade figures. Exports surprised on the upside, coming in at +20.0% y/y, versus +4.6% expected. Imports surprised the other way, printing +7.5% (+15.1% was forecast). This delivered a meaningful improvement in the trade deficit to -$3.31bn, against the -$4.95bn forecast.
  • We may be past the worst of the trade deficit positions; we saw a recent trough of -$6.0bn in August.
  • The print provided little relief for PHP though. Overnight the move higher in US real yields (10yr back to +133bps), coupled with the rebound in oil prices are likely offsets. We also US CPI on tap this evening.
  • Coming on Thursday is the BSP decision, a 50bps hike is widely expected.

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