The market moves on the news about inflation in the US
According to analysts, the data on inflation in the US, which will be published this week, may increase investors’ fears and put additional pressure on the stock market.
The Philippine Stock Exchange’s Core Composite Index (PSEi) closed Friday at 6,589.88, down 0.5% from the previous week and continuing its decline from the previous week.
When the 6600 support level was broken, Philstocks Financial Inc. Senior Analyst Japhet Tantiangko said failure to regain lost ground could see the area shrink to 6,400.
Meanwhile, rising US inflation above January’s 6.4% could highlight continued tightening by the US Federal Reserve and put pressure on stock and peso prices, he added.
“At home, investors can also look at data on our foreign trade and OFW (Overseas Filipino Workers) remittances,” Tantiangco continued.
“A wider trade deficit balance and weak remittance data could also impact our local currency trading, which in turn would have negative side effects on the market.”
January trade data will be released on March 14, and January remittance data will be released on March 15. US inflation for February will be announced on March 14 US time.
“After a series of hawkish comments from at least Fed Chair Powell…attention will turn to U.S. inflation data for February this week,” online brokerage 2TradeAsia.com said, citing U.S. Central Bank Governor Jerome Powell’s testimony before Congress. . last week
“This is likely to be the last piece of the puzzle needed to evaluate the next rate change as Powell hinted at a more aggressive rate hike. With recession fears back on the table, brace yourself for more volatility going forward,” he added.
The Federal Reserve is due to discuss policy in February. 21-22
With local inflation also remaining elevated “with … fluctuations that are unique to the Philippines” and with the Monetary Board meeting also scheduled for March 23, 2TradeAsia said “in mid-2023, there should be some concern for investors.”
“In the meantime, stick to solid value plays to offset the additional discomfort associated with interest rate and inflation risk in the short term,” he added.
Immediate market support was at 6400 and resistance was at 6700.