Personal Consumption Expenditures high, Wall Street closed 2Q22 lower. US May Core Deflator PCE up +0.3% MoM and +4.7% YoY; although below market expectations (+0.4% MoM; +4.8% YoY), it was still relatively high from the previous month +0.3% MoM and +4.9% YoY. PCE results remain high, reinforcing the Fed’s aggressive Hawkish stance in July, which is projected to raise the FFR 75 bps again to 2.25%-2.50%. The Nasdaq led Wall Street’s decline, falling more than 1%, closing the 2Q22 period. Other data shows Personal Spending in May only grew +0.2% (Vs. Apr. +0.6%), or restrained consumption as Personal Income was flat +0.5% in the same period.

Rupiah at IDR 14,900/USD ahead of inflation data. JCI was briefly depressed to the psychological level of 6,900, before finally closing at 6,911. The USD appreciation occurred after Jerome Powell’s speech said that an aggressive increase in the FFR in July was needed to suppress the spike in inflation. Meanwhile, on the domestic side, the rupiah depreciates as market players await the release of inflation data for June which is projected to rise by +0.45% MoM (+4.19% YoY), in line with rising prices for some food and domestic consumption, as well as global gold prices. The projection touches the upper limit of BI’s annual inflation target of 2%-4.2%. Starting the 3Q22 period, NHKSI projects the JCI to move upwards (technical rebound) in the range of 6,900-7,080.

Download full report HERE.