F. Yap Securities / 2TradeAsia

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.

Expect volatile trades with the month-end portfolio closing, especially with the effectivity of MSCI’s rebalancing.

Another range-bound session is seen, as buyers position on intra-day dips to position in select shares poised to finish stronger this year.

Participants are seen to give weight on Fed chair Powell’s statement last Friday, supporting expectations for policy easing measures.

Volatile sessions are seen, as local participants prepare for the long weekend break.

Activity might be range-bound, as some participants might seize on the local market’s recent incline to profit-take.