All three major US stock indexes closed significantly higher by more than 1%, with the Nasdaq leading the way with a nearly 2% gain and the largest daily percentage jump in a month; supported by economic data releases showing cooling inflation at the producer level and a slackening labor market, thereby contributing to optimism that the Federal Reserve may soon be able to end its aggressive interest rate hike cycle. US PPI (Mar.) eased rapidly to 2.7% (lower than forecast & previous period); Initial Jobless Claims also increased to 239k, which was higher than forecast & previous period. Financial markets are now pricing in a 33% chance that the US central bank will press the pause button and let the FFR to remain in the 4.75%-5% range at the upcoming May FOMC Meeting, as reported by CME Fedwatch. Investors’ focus now shifts to the year’s first quarter earnings season, particularly monitoring regional bank earnings, which will reveal more about the health of the banking sector and the outlook for credit activity. Bright economic data came from China as a surge in export and import performance (Mar.) resulted in a surplus that was twice as good as expected, where their Trade Balance (Mar.) figure came out at USD 88.19 billion, much higher than the forecast of USD 39.2 billion. The same situation could not be expected from continental Europe, where the UK GDP (Feb.), Industrial & Manufacturing Production (Feb.) growth, as well as their Trade Balance (Feb.) on a monthly basis came out lower than forecast. On the other hand, German CPI (Mar.) was released in line with expectations where Inflation on an annualized basis was able to ease to 7.4% YoY, compared to the previous month’s 8.7%. Overall, the Eurozone said that Industrial Production conditions in February started to show a better improvement than the forecasts and the previous month.
Today, global stock investors will be waiting for other important economic data from the US, namely Core Retail Sales (Mar.), Industrial & Manufacturing Production (Mar.), as well as the well-known insight from Michigan Consumer Expectations & Sentiment (Apr.) to conclude the soft landing signs that began to occur in the US economy. NHKSI RESEARCH believes that there are enough positive sentiments available to end this week in positive territory, particularly since Rupiah exchange rate is in the strongest position in the last 8 months (has successfully closed the August 2022 Gap at 14744 level); foreign buying interest is still consistent where it was still positive at IDR 882.35 billion yesterday. A solid bullish position can only be obtained if JCI is at least able to perch back above MA10 & MA50 or 6815 which is the closest Resistance at the moment. A break of Resistance 6850-6870 will be even more crucial to end this medium term downtrend. Advise: Wait &.
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