Core Viewpoint - The Philippine peso is expected to weaken in the second half of 2026 due to a projected strengthening of the US dollar and ongoing domestic challenges in the Philippines [1] Group 1: Economic Challenges - The Philippines is currently facing internal challenges primarily stemming from a corruption scandal related to flood funding, which has suppressed government spending and hindered overall economic growth [1] - The scandal has negatively impacted foreign investor sentiment, exerting downward pressure on portfolio capital flows and local asset prices [1] Group 2: Monetary Policy Implications - In response to these challenges, the likelihood of the Philippine central bank implementing further monetary easing has increased [1] - Economists at Malayan Banking expect the central bank to potentially cut interest rates by an additional 50 basis points by the end of 2026, aimed at supporting economic growth [1] - However, this move may weaken the peso's interest rate advantage compared to other emerging market currencies, reducing its attractiveness to international capital seeking arbitrage opportunities [1]

Group 1 - French Agricultural Credit Bank analysts indicate that Japan's corporate capital expenditure is expected to become cautious due to U.S. tariffs and concerns over global economic slowdown, potentially leading to a quarter-on-quarter contraction in Japan's economy in Q3 2025 [2] - Barclays Bank reports a surge in European high-yield bond issuance driven by refinancing needs and increased dividend payments, with issuance surpassing €80 billion since 2025, marking the second-highest level for the period [2] - ING analysts suggest that if geopolitical risks ease, the dollar may face downward pressure due to reduced safe-haven demand, while strong U.S. inflation data has led to a reassessment of Federal Reserve rate cut expectations, supporting the dollar [3] Group 2 - Analysts believe the Bank of England may maintain a cautious interest rate stance for the remainder of 2025, with expectations to pause rate cuts in September and December, providing key support for the pound [4]

Core Viewpoint - The market is cautious regarding the US CPI data, and unless there are clear signs of increased price pressure from tariffs, the inflation report is unlikely to significantly alter expectations for a Fed rate cut or further easing in September [1] Group 1 - Analysts from Malayan Bank indicate that the market sentiment is cautious about the upcoming US CPI data [1] - There is an expectation that the inflation report will not lead to major changes in market predictions for the Federal Reserve's actions in September [1] - The focus remains on the potential impact of tariffs on price pressures, which could influence future monetary policy decisions [1]

Core Viewpoint - Maybank economists suggest that the Bank of Thailand may lower policy interest rates in August due to a more evident economic slowdown [1] Economic Outlook - The report indicates that by August, the Bank of Thailand should have a clearer understanding of the impact of U.S. tariff policies and domestic political factors on the economic trajectory [1] - The central bank has signaled a more dovish stance, anticipating weaker GDP growth in the second half of the year due to trade headwinds and sluggish consumption [1]