FFR Predicted to Rises +100Bps, Core Inflation approaches 7%. Dow Jones fell 1,200 points, a risk-off as technology stocks are sensitive to higher FFR. CME FedWatch starts projecting a +100Bps September FFR increase probability of 18%, from the previous +75Bps 82% increase, responding negatively to the August YoY US Core Inflation rate at 6.3% (Vs. Surv. 6.1%; Jul. 5.9%). Core Inflation is the Fed’s benchmark in setting the FFR amount. The potential for further aggressive Hawkish September FFR hikes of +100Bps occurs after June and July rose +75Bps each, driving US 3Q22 GDP to the brink of recession. This can be seen from the widening of the UST2Y Yield Inversion spread (3.76%) Vs. UST10Y (3.41%) from 20Bps to 35Bps a week.
The negative sentiment of aggressive Hawkish continued, amid of the JCI trying to hold on to the psychological level of 7,300. Investors are watching the speculation of a +100Bps increase in September FFR at the FOMC Meeting next week. Yesterday, the JCI managed to close above 7,300, after previously touching 7,345, recording total transactions of IDR 16.5 Trillion with foreign investors Net Buy of IDR 1.4 Trillion. In the midst of a number of sentiments, NHKSI Research projects that JCI has the potential to move bullish, with Support: 7,280-7,240 and Resistance: 7.345-7,355 / 7,500 / 7,600.
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