Philippines Stocks Finish at 3-1/2-Month Low
The PSE Index tumbled 195 points or 2.9% to end at a 3-1/2 month low of 6,436 on Friday, ending the week by 4.4% lower, after local media reports said that the Philippine government has tightened measures on mass and religious gatherings in areas under general community quarantine until April 4th following the surge in local COVID-19 cases. In addition, authorities reportedly will close for one month the country’s borders to foreigners starting March 22th. Sentiment was also dragged down by worries that higher inflation could prompt central banks to raise interest rates, which would cool economic activity. Investors were also downbeat about the sustainability of the economic recovery in the US after official data showed the number of Americans seeking unemployment benefits rose last week to 770,000. Losers were broad-based: property (-4.5%), financials (-2.6%), services (-2.6%), holding firms (-2.5%), energy (-1.3%), and industrials (-0.7%).
Australian Dollar Gains Slightly
The Australian Dollar added 0.00042 points or 0.05% to 0.7761 against the US Dollar on Friday following a lift in long term bond yields as the US Federal Reserve’s pledged to keep the near-zero rate outlook for at least 2023 despite strong growth and inflation outlook. Fed Chair Powell also reiterated any rise in inflation would likely be temporary and showed no concerns over the recent bond sell-off. Local 10-year bond yields lifted to 23-month highs of 1.82% while US 10-year rates hit fresh 14-month highs of 1.701%. Sentiment was also affected as the US and China leveled sharp rebukes of each others’ policies in the first high-level, in-person talks of the Biden administration on Thursday. Meantime, preliminary data showed that retail sales in Australia unexpectedly fell 1.1% mom in February, missing market consensus of a 0.4% gain and falling the most in 5 months, while the jobless rate fell to 5.8%, the lowest in 11 months.
Oil on Track for Biggest Weekly Drop Since September
Oil prices declined on Friday for the sixth day in a row, and were on track for their biggest weekly fall since September, as a resurgence of COVID-19 infections in some countries dampened hopes for an imminent recovery in global demand. In Europe, France reportedly imposed a month-long lockdown on Paris and other parts of the nation; while in Asia, India on Thursday saw its highest daily new virus infections in over three months. Meantime, China reported 11 new virus cases in the mainland on Thursday, up from six a day earlier. Meantime, the EIA said earlier this week that demand is unlikely to return to pre-pandemic levels until 2023. On the data front, the EIA showed US crude inventories rose 2.4 million barrels last week, a fourth straight week of rises. At around 07:00 AM GMT, WTI crude sank 1.1% to $59.38 a barrel. Brent crude dipped 1.2% to $62.55 a barrel.