USD/PHP Back Above 55.00, Local Equities Higher Post CPI Miss

USD/PHP is firmer in the first part of trade, the pair back in the 55.05/10 region. This is around 0.40% weaker in PHP terms versus yesterday's close. Some of this is catch up to USD strength post this close, with the 1 month USD/PHP NDF last at 55.10/15, little change for the session.

• The 50 (55.16) and 200 (55.22) day EMAs are nearby, but USD/PHP remains close to the midpoint of ranges for the past few weeks. Support is evident sub 54.80, but moves towards 55.50 could draw selling interest.
• Feb inflation data crossed earlier, coming in below expectations, 8.6% y/y, 8.9% was forecast and 8.7% was the prior print. Some easing in food and transport costs helped but inflation pressures remained firm elsewhere. Core prices were 7.8% y/y, the strongest pace since 1999.
• BSP Governor Medalla stated recently, a 9% handle on today's print could mean 50bps hike at the next BSP meeting, later in March. Given today's outcome was sub this level and towards the lower end of the BSP expectations (8.5% -9.3%), it tilts the risks towards a 25bps move.
• The inflation battle is far from over though. The head of the National Economic and Development Authority (NEDA) stated the country needs to recalibrate its inflation strategies.
• Local equities are trading with a positive tone, up 0.90% at this stage. This is likely helping curb PHP pressures are the margins.