USD/PHP Backs Away From 57.00, Food/Rice Inflation Expected To Ease In September

USD/PHP sits comfortably away from the 57.00 resistance point, aided by a broader USD pull back and lower oil prices. Current levels near 56.70 remain close to the mid-point of the range seen in September. We are sub the 20-EMA, which sits at 56.75. Early September lows were near 56.50.

• We still await bank lending data for August, but most focus will rest on the Sep CPI print next Thursday. The market consensus, at this stage is for a 5.3% y/y print, unchanged from August (0.4% m/m is the monthly projection).
• Earlier, National Economic and Development Authority Secretary Arsenio Balisacan stated that food inflation pressures from food should diminish. Rice inflation is forecast to be lower this month. The rice price cap may also be lifted in November.
• He also added that government spending may boost Q3/Q4 growth, but that full year growth was likely to be at the lower end of the governments 6-7% target (BSP has a growth forecast less than 5%).
• In the equity space, the PCOMP has trimmed recent gains, but sits just off multi week highs (last near 6360). Offshore investors bought a small amount of local stocks yesterday, but outflows this week remain at -$273.5mn.