• Wall Street’s major indexes closed higher on a highly volatile Wednesday (11/10/23) trading, after the release of minutes from the last FOMC meeting in September, which showed caution among policy makers about continuing the upward trend in interest rates, is fueling investor hopes that rates would stay steady, at least at November meeting of the US central bank. In the meeting minutes, Federal Reserve officials pointed to uncertainties around the economy, oil prices and financial markets as supports in determining the extent of additional monetary policy. At the September 19-20 FOMC Meeting, most of them seemed to agree that one more rate hike is needed for the rest of 2023, but in reality a lot has happened from the date of the meeting until now; so recently Fed officials have been more in a dovish tone. While all eyes were waiting for the US consumer inflation (CPI) results for September, the PPI data was released with a higher than expected increase (on a monthly basis: 0.5% mom vs 0.3% forecast; YoY: 2.2% yoy vs 1.6% forecast) due to higher energy prices, but the increase in Core PPI was more moderate. No surprise that this news boosted interest rate sensitive sectors, namely Real-Estate and Utilities which led the US stock market gains as US Treasury yields fell. Meanwhile, the energy sector fell 1.4% due to a slump in Exxon Mobil shares after the company agreed to buy Pioneer Natural Resources, with a deal valued at USD 59.5 billion. Other than that, the fall in Energy sector also happened after the US released the API Weekly Crude Oil Stock for the week ending October 6 at nearly 13 million barrels, which was higher than the forecast of 1.3 million barrels. This was the largest oil production since last February; high supply was also detected in US gasoline inventories for 2 consecutive weeks.
• US ECONOMIC DATA: in addition to the Consumer Price Index (CPI) which will be out tonight at 19.30 WIB, Initial Jobless Claims data is also back in the spotlight, with the market predicting jobless claims to increase slightly from 207 thousand the previous week to 210 thousand. US Crude Oil Inventories data will also again play an important role in determining the direction of the price of this crucial commodity.
• EUROPEAN MARKETS: Speaking of CPI, Germany has reported CPI (Sept.) at 4.5% yoy, in line with expectations and a successful slope from the previous month at 6.1%. Next, the UK will release GDP (Aug.), Industrial & Manufacturing Production (Aug.), and Trade Balance (Aug.). Meanwhile, one of the European Central Bank (ECB) officials made a speech at the IMF meeting in Morocco, cautioned that it might be premature to declare a win over inflation due to the changing economic conditions in the euro-zone. The ECB official underlined the need for patience and highlighted the importance of Wage Growth data at the beginning of next year to further understand where Inflation is heading in continental Europe.
• ASIA MARKETS: After an underwhelming Motorcycle sales report, Car sales in Indonesia were seen plunging – 20.1% (Sept.) for the 4th consecutive month and almost matching this year’s low of -28.8% in May. South Korea reported a Current Account position (Aug.) that increased from the previous month. On the other hand, the decline in Machine Tool Orders from Japan was detected to be slowing down. Japan just released PPI data (Sept.) below estimates (2.0% yoy vs 2.3% forecast), also lower than the previous month’s 3.3%. This afternoon market participants are looking forward to the New Loans data from China which is expected to increase to CNY2.5 billion from the previous position of CNY1.36 billion, which will explain the Chinese economy rolling in a more vibrant direction.
• JCI made another attempt to break the critical Resistance level of 6950 in order to free the way to 7000s territory again but unfortunately still blocked by MA20. The success of breaking MA10 & MA50 in the last 2 days should be seen that the buying power is getting stronger even though foreign is still on Net Sell of IDR887.9 billion over the last week. NHKSI RESEARCH still recommends that investors/traders use trading opportunities with caution especially ahead of important US Inflation data which will make the stock market highly volatile.
• TINS : Spent IDR39.13 Billion in Exploration Costs
• BNGA : Hold Second EGMS on October 19, 2023
• BBNI : Export-Oriented Lending Reaches IDR28.53 T
Domestic & Global News
• Indonesia Will Import 125,000 Tons of Sugar, This is What Sugarcane Farmers Warned About
• Copper Prices Strengthen on Declining US Bond Yields and Hope from China
Download full report HERE.