Weighed By Trade Deficit, But Detail Suggest Firm Domestic Demand

USD/PHP is tracking higher, last in the 55.45/50 region, slightly down from session highs (55.52). This is nearly +0.35% above closing levels from yesterday, with PHP one of the weaker performers in the region so far today. A wider than expected trade deficit is weighing.

• Spot is very close to the simple 20-day MA, while support for the pair has been evident under 55.20 recently. The 50 and 100 day MAs are just under 55.10. On the topside the 200-day MA is near 56.11
• The Mar trade deficit was wider than expected at -$4928mn, versus -$4400mn forecast and -$3905mn prior. Export growth was better than expected, -9.1% y/y, -18.1% was the forecast. Imports were firmer than expected as well, -2.7% y/y, versus -11.4% y/y forecast and -11.8% prior.
• Looking at the detail the upside surprise on imports was driven by better consumer related and capital goods imports. This hints at a still reasonable domestic demand backdrop, albeit down from the heady 2022 pace.
• Elsewhere, local equities are firmer today, +0.35% so far, but this only unwinds a part of the 1.27% fall yesterday.
• Looking ahead, the next key release is Q1 GDP on Thurs, an input into the next BSP decision. The market expects a 6.2% y/y (0.7% q/q) outcome versus 7.1% y/y prior (2.4% q/q).