Pulls Back From ~56.90, But Weaker Onshore Equities Remain A Headwind For PHP

USD/PHP is the only USD/Asia pair to be tracking lower in the first part of Friday trade. The pair was last near 56.70, down slightly on closing levels from yesterday. We opened in the 56.85/90 region. The Peso is outperforming generally firmer USD/Asia trends elsewhere and USD strength against the majors. Note though that USD/PHP hasn't been that strongly correlated with broader USD moves this week.

• USD/PHP is not too far recent highs around 57.00. Recall earlier in the week that Philippines Finance Chief Diokno stated the authorities working assumption on USD/PHP was a 54-57 range. Hence the closer we get to the top end of this range the potential for verbal jaw boning on FX and or actual intervention is likely to rise.
• On the data front we have the July budget balance on tap today.
• Onshore equities continue to track lower, the PCOMP last near 6200, which is around fresh lows going back to November last year. Local banks are underperforming.
• Local media has reported that bank lending continues to ease, according to preliminary BSP data. Outstanding loans were +7.8% y/y in June, versus +9.4% in May.