Today’s Outlook:
• Global stock indices moved flat to lower on Thursday (11/01/24) as economic data showed US consumer price inflation came in above economists’ expectations in December, raising doubts that the Federal Reserve will cut interest rates as quickly as the market expects. US Treasury yields fell, while the US Dollar weakened against the Euro and Yen but rebounded from the lows reached before this US CPI report was released. Today’s data showed the headline CPI rose 0.3% last month, with an annualized increase of 3.4%, both higher than initial estimates of 0.2% and 3.2% respectively. Nevertheless, analysts believe that this actual figure is not a bad result; they still believe that the Fed will still cut rates, though perhaps not as soon as March. Following the data, Initial Jobless Claims also surprised with a lower-than-expected actual figure of 202,000 jobless claims in the week ending Jan 5, compared to 210,000 forecast and 203,000 in the previous week. In overall, all the above data suggests the US economy remains strong and likely to avoid recession.
• THE DOLLAR INDEX was last down 0.05% today at 102.29, although this position is actually slightly up from 102.20 before the data was released. The euro rose 0.09% today to USD 1.09820. The greenback’s gains narrowed slightly to 0.20% at 145.48 Yen, after reaching 146.10, the highest since December 11. The latest 10-year US TREASURY YIELD fell 4.9 basis points (bps) to 3.980%. BITCOIN reached USD 49,051, the highest since December 2021, and was last up 1.80% at $46,800. The US SEC on Wednesday night gave the green light to offer a bitcoin-based ETF. Investors’ focus will soon turn to the announcement of producer-level inflation (US PPI) figures which are also forecast to rise in December by 1.3% yoy, as well as the start of the US earnings season, with banking giants including JPMorgan Chase and Wells Fargo scheduled to report on Friday.
• ASIA MARKETS: It’s China’s turn to be in the spotlight this morning, as they will release their CPI (Dec) figures which are expected to struggle out of deflationary territory, in order to improve their economy. Following that, it is also important to monitor China’s Trade Balance figures in Dec, regarding their Export & Import growth.
• EUROPEAN MARKETS: Later this afternoon, UK market participants will find out how healthy the improvement in their Industrial & Manufacturing Production conditions in November, which is predicted to grow positively.
• COMMODITIES: OIL rose nearly 1% in Thursday trading after Iran seized an Iraqi-owned oil tanker bound for Turkey off the coast of Oman, believed to be retaliation to the US for last year’s seizure of the same vessel and cargo. The Yemen-based Houthi militants have stepped up their largest-ever attack on the Red Sea’s commercial shipping lanes; thus further raising the prospect of widespread conflict in the Middle East area. As such, Brent futures rose 0.8%, to USD 77.41 per barrel, while US West Texas Intermediate (WTI) crude rose 0.9%, to USD 72.02. Global trade fell 1.3% from November to December 2023 as militant actions against merchant ships in the Red Sea led to a decline in the volume of cargo transported in the region. Barclays lowered its Brent Oil price forecast for 2024 by USD 8 to USD 85/barrel considering the following factors: sluggish global demand along with chaos in the Middle East; causing producers, consumers, and market participants to become paranoid about oil prices.
• GOLD prices in the spot market added 0.1% to USD 2,024.69 per ounce.
• JCI finally closed 0.1% weaker to 7219.96, back below MA20 Support (7236) after a day of strengthening and had an encounter with MA10 Resistance at 7277 High point. NHKSI RESEARCH considers yesterday’s strengthening attempt is still limited technical rebound because JCI actually has a target to go down to around 7070-7050, based on the pattern (up to the round number 7000 as psychological support). The good news is that yesterday the foreign investors made a net buy of IDR 675 billion. If the consolidation continues today, then investors/traders are advised to reduce positions again, especially if the Support position from the previous Low level of 7156 does not last.
Company News
• AKRA: Increase Capital of 2 Subsidiaries
• INDY: Subsidiary aims for 31 million tons of coal
• ASSA: Prepare Capex in 2024 Worth IDR1.5 T
Domestic & Global News
• Entrepreneurs Say 40%-75% Tax Could Destroy Entertainment Industry
• Google Layoffs Hundreds of Workers, This Time in the Hardware and Voice Assistant Division
Download full report HERE.
