USD/PHP Holding Close To 56.00, BSP Seen On Hold In April

Spot USD/PHP sits marginally higher for the session in recent dealings, last near 56.02. We remain well within recent ranges, with key EMAs clustered near by. The 200-day is a little lower, back at 55.93. Late Feb highs printed near 56.32, which was reportedly driven by month USD demand.

• The earlier Feb CPI data hasn't shifted sentiment. It was firmer than expected, but core CPI continued to lose momentum in y/y terms.
• After the print the BSP stated it is appropriate to keep policy settings unchanged (the next policy meeting is in early April), while noting base effects could keep inflation suppressed in Q1 but could re-accelerate in Q2 due to el nino effects.
• In the cross asset space, local equities are just off recent highs above 7000 (for the PCOMP), which has outperformed other parts of SEA in the equity space (most notably Thailand). Offshore equity inflows continue at a moderate pace. PHP remains the second best performer in EM Asia FX YTD (behind INR).
• The data calendar just unemployment data out on Friday, along with bank lending data.