Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Asian Fund Managers Turn More Optimistic on Growth but Curb Equity Return Expectations: BofA Survey 
Oil Prices Steady in Asia but Headed for Weekly Loss on Supply Glut Concerns 
Japan Inflation Holds Firm in November as BOJ Nears Key Rate Hike Decision 
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Austan Goolsbee Signals Potential for More Fed Rate Cuts as Inflation Shows Improvement 
Asian Currencies Slip as Dollar Strengthens; Indian Rupee Rebounds on Intervention Hopes 
Oil Prices Climb on Venezuela Blockade, Russia Sanctions Fears, and Supply Risks 
U.S. Stock Futures Edge Higher as Micron Earnings Boost AI Sentiment Ahead of CPI Data 
The Philippines peso has underperformed in comparison to its peers in the recent months. Part of this reflects increasing political concerns among foreign investors. There was also a spike in the 5Y credit default swap (CDS) spread to 117 basis points, from 84 bps in early September.
As the distortion from low oil prices dissipates going into 2017, CPI inflation should average 2.6 percent next year, up from a projected 1.6 percent this year. Coupled with the anticipated upward pressure from global rates, the higher inflation trajectory is likely to prompt the BSP to tighten its policy stance.
Meanwhile, major central banks around the world are recognizing the limits of monetary policy. With taper a consideration for the European Central Bank (ECB) and the Bank of Japan (BOJ) over the coming quarters, longer-term developed market yields are already heading higher.
Against this backdrop, the market is likely to be more discerning on fundamentals. Inflation and rate hike risks are not adequately priced into the market. Couched in an environment of rising developed market interest rates, there is considerable room for higher PHgov yields.
