F. Yap Securities / 2TradeAsia

Another upbeat tone is in store for local equities, as overseas fund managers take interest in China’s stimulus measures, alongside the Fed’s sequel rate cuts.

Investors might monitor continuity of yesterday’s breather, as gauges firms up on a solid base to support stronger rallies.

Hints for possible tempered inflation in September plus S&P Global Ratings’ rate cut outlook on the Philippines may support advances.

With just a few points shy from the 7,500 zone, participants are likely to take on feelers whether some might seize on this strength to cash-out, while monitoring the depth of positioning on intra-day dips.

The local central bank’s 250bps cut in banks’ reserve requirement was more than our estimated 100bps, underscoring their goal of pump-priming the economy.

The market might take its cue from Wall Street’s incline (DJIA +1.26%, Nasdaq Comp. +2.51%) as expectations build for a new cycle of monetary policy easing with the Fed’s rate cut move.

Investors will highlight the Fed’s 50bps rate cut, as well as BSP chief Remolona, Jr.’s stance for ‘significant reduction’ in banks’ reserve requirements.

Participants will monitor a firmer momentum trend as the PSEi fortifies the 7,000 level, with the return of some fund managers from their Mid-Autumn Festival break.

Investors may stay glued to FOMC’s 17-18 September meeting, with mixed views on whether the Fed would support either 25 or 50bps rate cut.

Higher sessions are seen, as expectations build for an expected rate cut from the Fed’s meeting next week.

Local equities might take its cue from Wall Street’s rise, as expectations are strengthened for the Fed’s possible 25bps rate cut next week.

The mood could sway to Wall Street’s sharp decline, but several are likely to seize on this opportunity to position.

Light trades may persist, with some fund managers on the US Labor Day holiday.

Expectations for slower August inflation would strengthen expectations for policy easing from BSP, supporting deceleration in business costs.

Participants are likely to be watchful on month-end closing, especially for prospective market-on-close (MOC) price action.