Here are recent key economic events and what to look out for in September.  

Key points  
 

• Geopolitical tensions in the Middle East escalate further, with renewed military attacks between US, Iran, and their respective allies.  
• Headline inflation in the US and the Philippines continue to remain elevated, as high energy prices continue to weigh on overall inflation.  
• In the Philippines, upside risks apart from energy costs also persist. The projected occurrence of a very strong El Niño in the coming months is expected to adversely impact agricultural production in the country and in our trading partners. Moreover, the implementation of a minimum wage hike in the National Capital Region would also weigh on overall business costs.  

What now?

• In the Federal Open Market Committee meeting on September 15-16, Eastern Time, Metrobank forecasts that policy rates would be maintained, as policymakers balance risks to price stability and maximum employment.  
• Domestically, Metrobank maintains outlook that the Bangko Sentral ng Pilipinas (BSP) will end the current hiking cycle with another 25-basis-point (bp) policy rate hike in October.
• Local Fixed Income – The recent wave of risk-off selling has led to an upward shift in the yield curve. While present geopolitical risks and anticipated weather-related inflationary pressure cast a near-term bearish tone on local bonds, periods of weakness may offer investors an attractive opportunity to add fixed income positions and lock in higher yields.  
• Local Equities – Market sentiment may remain cautious amid elevated oil prices, tensions in the Middle East, and lingering inflation risks. While a steady Fed rate may provide support, macro-resilient corporates—including some consumer plays, quality banks, and telecommunications—may be favored, while maintaining exposure to stable utilities. Staying selective and keeping modest cash buffers may be considered amid ongoing volatility.
• Global Fixed Income – Persistent uncertainty in the Middle East and sticky US inflation threaten to bring US Treasury yields to multi-year highs. Maintaining a neutral to underweight duration stance—by positioning tactically in the front of the curve and deploying opportunistically in high-quality sovereign and corporate credits up to the 5-year area—may be preferred.  
• Global Equities – Staying diversified across regions and sectors, with a selective bias on technology and defensive sectors, may be considered. Supportive earnings momentum may help sustain the long-term bullish outlook on global equities. However, escalating tensions in the Middle East tensions and sticky inflation may cap gains and keep investors cautious in the near term. Fed rate hike expectations may serve as a key headwind in the equities market moving forward. Pullbacks may be considered as opportunities to selectively add exposure to companies with strong earnings and resilient fundamentals.
• Currency – The US dollar is expected to stay firm against the peso in the near termas strong corporate and importer demand for the USD, combined with lingering geopolitical risks, continue to support the pair. With the bullish USD/PHP trend intact and support levels moving higher, periods of peso strength may be viewed as opportunities to accumulate dollars. Meanwhile, upside risks toward the 62.95 area remain in focus.