Weak trading seen

THE LOCAL stock market is closed today (Monday) due to the observance of National Heroes Day.

Last week, the Philippine Stock Exchange index (PSEi) slipped by 85.26 points or 1 percent to close on Friday at 7,845.49 ahead of US Federal Reserve Chair Janet Yellen’s speech at the Jackson Hole symposium in Wyoming, a closely watched annual gathering of policymakers.

The PSEi is seen drawing guidance from Yellen’s speech. Yellen’s message was that the case for US interest rate increase has strengthened in recent months, without providing any hint on the timing, although other Federal Open Market Committee (FOMC)

members indicated that a rate adjustment in September was possible.

After Yellen’s speech, the Dow Jones Industrial Index fell by 53.01 points or 0.29 percent.

“Economic conditions aside, September could be the preferred meeting for the next hike if the FOMC wanted to get ahead of the economic drag from a rise in policy uncertainty associated with the presidential election,” Citigroup said in a research note issued after Yellen’s speech.

Yellen has thus given financial markets reason to expect a rate increase this year, Citi said. But although the hawks and centrists on the FOMC have been quite vocal about their readiness to raise rates, Citi noted that the main doves on the board had been remarkably silent. Doris Dumlao-Abadilla