US stocks closed relatively flat in early week trading last Monday (10/04/23) and the US Dollar crawled up after strong jobs data last week pointed to the Federal Reserve that would still have a reason to keep interest rates high, while the yen eased after Japan’s new central bank governor vowed to maintain ultra -loose policy. The rising US Dollar dragged global Gold prices down below the psychological USD 2000 level, while sovereign bond yields climbed amid expectations of a rate hike at the upcoming FOMC Meeting on May 3rd. Investors will focus on the release of US Inflation (Mar.) data tomorrow night at around 19.30 GMT, followed by FOMC Meeting Minutes, PPI (Mar.), and Initial Jobless Claims on Thursday. Market participants are starting to factor in a 71.7% likelihood that the Fed will raise the FFR by 25 bps to a range of 5%-5.25% next month, as reported by CME Group Fedwatch. On the other hand, recession worries have risen as commercial lending fell after the sudden collapse of Silicon Valley Bank in March tightened credit conditions among US banks; although the Fed’s emergency lending program has eased some of those concerns. Traders also are betting that the Fed will cut rates in the second half to ward off an economic downturn.

While from the Asia region, the market was colored by the rising geopolitical tension around the issue of China’s military training in the Gulf of Taiwan. The Chinese Inflation rate (Mar.) will be awaited by investors today with expectations still flat at 1%. Domestically, Indonesia’s foreign exchange reserves in March were recorded to be fattening at USD 145.20 billion, higher than expectations & the previous month. On the other hand, motorcycle sales were detected to grow 40.5% YoY, lower than the previous period at 56.3%. European markets, which will be open today after the Easter holiday, will be awaiting the Eurozone Retail Sales (Feb.) data. Considering the current market sentiment, NHKSI RESEARCH expects trading to remain flat today with JCI trying to maintain MA20 / 6745 Support level as it did yesterday, while trying to break above MA10 / 6800 Resistance to secure this short term uptrend. Indonesian capital market investors/traders are advised to Wait & See as market participants are generally quite restrained ahead of important US economic data releases.

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