Hike rates

Emerging Markets: Philippine central bank set to hike rates 50 basis points in August as Asian equities rise on easing recession concerns

SINGAPORE, July 8 (Reuters): Asian stocks edged higher on Friday, tracking Wall Street’s overnight gains, after positive signals from U.S. central bank officials eased fears of an economic recession, which also supported most currencies in the region.

Indonesian stocks rose more than 1% and were poised for their second consecutive weekly rise, while the Indonesian rupiah and Malaysian ringgit edged up 0.1%.

All three major U.S. indexes rose overnight as two Federal Reserve officials downplayed recession fears and signaled a slowing pace of rate hikes after July.

Reference to the United States. Treasury yields rose overnight from five-week lows, reducing the magnitude of the inversion in a key part of the yield curve and also easing recession fears. “

Yields on ten-year U.S. Treasuries closed at 3% as markets eased recession worries… There is a chance for a more benign risk backdrop if the fear of maximum duration is behind us as we expect. If the Fed doesn’t overtighten, a soft landing is likely,” DBS rate strategist Eugene Leow said in a note.

With US recession fears easing slightly, Asian equities were boosted by economically sensitive stocks, which rose along with oil prices and interest rates.

Risk sentiment also spurred the reduction of bearish bets in emerging currency markets.

However, news of the assassination of former Japanese Prime Minister Shinzo Abe prompted some selling in regional currencies as investors shifted to safer assets, avoiding riskier ones.

“It (the shooting of the former Japanese prime minister) triggered selling in emerging currency markets on Friday afternoon, but it was very limited as the focus remained on the Fed minutes, which caused renewed relief in Asia,” said Junvum Kim, sales. trader at Saxo Capital Markets.

In South Korea, the won fell slightly, after weakening 0.25% over the week, while stocks rose more than 1% during the day and were expected to see their biggest weekly jump in five. month.

Elsewhere, the central bank of the Philippines is ready to raise policy rates by 50 basis points at its August meeting and follow up with new policy measures to control inflation and counter currency depreciation, it said on Thursday. its governor.

Shares in Manila jumped more than 2% and were set for their first weekly gain in five, while the peso traded down 0.1%.

Thailand’s central bank said it would let the baht move based on market forces, but would act if the currency is excessively volatile. The baht reversed its early 0.2% gains to trade flat after the central bank’s statement. -Bloomberg