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Sell-Side Updates Post Yesterday's CPI, BSP Easing Not Until H2 2024


US banks don't see BSP easing until H2 2024, see below for more details.

J.P Morgan: "Revise lower CPI forecasts; BSP to stand pat in 1H24 and ease by 50bp in 2H24 – Following today’s weaker-than-expected print, we revise lower our headline CPI forecasts from 6.1% to 6.0% in 2023 and from 4.6% to 4.0% in 2024. However, due to base effects, seasonality factors, and potential upcoming price hikes (e.g., minimum wage, transport charge, electricity tariff), the disinflation trajectory next year could be choppy. Until a sustained downward trend in overall prices toward the 2-4% target range is achieved (earliest in 3Q24), the BSP will likely stand pat in 1H24 and only deliver 50bp of easing in 2H24, predicated on our in-house view of 100bp of Fed rate cuts in the same time frame. "

Goldman Sachs: "Today's reading was close to the lower band of BSP's monthly inflation forecast range of 4.0% to 4.8%. Going forward, we expect BSP to keep its policy rate unchanged at 6.50% until Q3 2024 as inflation eases."

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