La DOTCE Vita: Another test for resilience

Day 1 in the books. Bombs have been unleashed and war is seething.

As expected, we’ve seen commodity prices move. Oil is up 8 to 9%. Gold is up 2% while 10-year US Treasuries are trading at 3.96 thereabouts. Risk off.

Now we know that the fate of financial markets and the economy hinges on how long this conflict in the Middle East drags out. Sad to say, we have no idea on when this will end.

So for now the best we can do is to hold on to core positions. Wait for the fog of war to clear.

Until then, we sit tight and minimize losses and, most importantly, try not to lose our heads.

For the economy we’ll likely brace for weaker growth. Inflation is now all but expected to breach the target and the central bank’s easing cycle is over. The USD/PHP exchange rate is pressured higher as a bloated oil bill means more demand for dollars.

We can only hope for a full cessation of hostilities at the soonest.

(Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.) 

NICHOLAS MAPA is Metrobank’s Chief Economist, Market Strategist, and Head of the Research and Market Strategy Department in the Financial Markets Sector. He graduated from the University of Asia and the Pacific (UA&P) with an undergraduate degree in Humanities and a Master of Science (MSc) in Industrial Economics. He also completed an MA in Economics from Vanderbilt University and an MBA from the Kelley School of Business at Indiana University. He travels regularly with his family, enamored by culture and history. An avid learner, he also reads extensively.