Caution ahead of Yellen’s congressional testimony


An air of caution will prevail over the financial markets worldwide, including the Philippines, ahead of the assessment of the US economy by Federal Reserve chief Janet Yellen before the Congress on Wednesday (PH time).

“After better-than-expected US jobs report last week, I think … investors will wait for cues from the statement of chairwoman Janet Yellen to US Congress on Wednesday,” IB Gimenez Securities Inc. research head Joylin Telagen said.

Regional markets will take cues on how the US economy is performing and whether the Fed will undertake new policy moves, she added.

Last month, the Fed has raised interest rates by 25 basis points to 1.25 percent.

The interest rate forecast on federal funds is among the semi-annual monetary report by US central bank to Congress.

However, Summit Securities Inc. President Harry Liu speculated that the market would likely trade higher as part of its consolidation move.

Regina Capital Corp. Managing Director Luis Limlingan said among the economic data to be released this week include The Beige Book, crude oil inventories, jobless claims, consumer price index, retail sales, and industrial production.

The Beige Book is an account of the current US economic condition published eight times a year by the Fed.

“In the Philippines, we will be watching the balance of trade data,” Limlingan said.

On Friday, the benchmark index posted a marginal increase of 0.01 percent or 1.02 points to close at 7,889.33. The broader All Shares declined by 0.04 percent or 1.73 points to finish at 4,735.12.



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