US inflation remains high, and the Fed is projected to raise June FFR by 50 bps to 1.25%-1.50%. Earlier in the week, Nasdaq led the decline with -4.29%; followed by the S&P 500 and Dow Jones which fell -3.20% and -1.99% respectively. Investors are looking forward to the release of US inflation data for April period, which is projected to remain high or at 8.1% YoY (Vs. 8.5% YoY in March).

April core inflation was booked at 2.60% YoY, or a moderate increase, and has the chance to make BI hold back the BI 7DRRR at its lowest level of 3.50%. BI will only adjust BI 7DRRR if core inflation starts to move above the target at 4% YoY. BI’s Dovish stance, in contrast to the Hawkish Fed which has raised the FFR by 75 bps in
2022, has created a number of pressures on domestic financial markets. JCI closed down -4.4% or close to yesterday’s trading halt, with foreign investors recording a net sell of IDR 2.6 trillion. Meanwhile, rupiah depreciated by 0.4% to IDR 14,558/USD compared to the end of April. On the other hand, the safe haven instrument of 10-year SUN recorded a yield increase of up to 30 bps to 7.28% in the same period. NHKSI Research projects that the JCI will move downward in the range of 6,800-7,000.

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