Philippines: Will the central bank pause policy tightening? - ING

Sandeep Kanihama FXStreet Contributor

Prakash Sakpal, Economist at ING, suggests that the stage is set for the Philippines’ central bank to keep its policy on hold when it meets next week even though a surprisingly steep drop in inflation in November than expected, to 6.0% from 6.7% in the previous month vs a consensus of 6.3% was a relief for the Bank.

Key Quotes

“The central bank meeting is unlikely to pass as a complete non-event as markets will be focused on the central bank’s assessment of inflation-growth risks for 2019, while the balance of risks remains tilted toward inflation considering current elevated inflation expectations and the second-round effects of the administrative hikes in transport and fuel.”

“Even so, we believe inflation has peaked, and so has the central rate hike cycle, which could even make the central bank ease the policy as early as the second quarter of 2019.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD stays weak near 1.1850 after dismal German ZEW data

EUR/USD remains in the red near 1.1850 in the European session on Tuesday. A broad US Dollar bullish consolidation combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD holds losees near 1.3600 after weak UK jobs report

GBP/USD is holding moderate losses near the 1.3600 level in Tuesday's European trading. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month. This narrative keeps the Pound Sterling under bearish pressure.

Gold pares intraday losses; keeps the red above $4,900 amid receding safe-haven demand

Gold (XAU/USD) attracts some follow-through selling for the second straight day and dives to over a one-week low, around the $4,858 area, heading into the European session on Tuesday.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.