Wall Street’s main index ended mixed and volatile as the market responded to the US Inflation (Jan.) data, which came in at 6.4% YoY due to higher rent and food costs; higher than expected at 6.2%, though lower than 6.5% in Dec. Meanwhile, Core Inflation still grew at 5.6% YoY, which is above the forecast of 5.5% and lower than 5.7% in Dec. Market traders are betting on at least two more 25 basis point rate hikes this year, in March and May; bringing the FFR to peak at 5.28% in July. From the Europe, UK’s labor market data showed solid numbers, leaving the US & EU with the same concerns of untamed inflationary pressures. Eurozone’s 4Q22 GDP was reported as expected at 1.9% YoY and 0.1% QoQ, indicating an economic slowdown towards recession began to appear as a result of the European Central Bank’s 3% interest rate hike since July. European market began to consider another 1% hike before the ECB’s benchmark rate peaked; anticipating the release of UK Inflation (Jan.) data later this afternoon (WIB), where it remains at a double-digit level of 10.5% YoY in the last reading. From the East, Japan’s 4Q22 GDP showed growth below expectation at 0.6% YoY and 0.2% QoQ, yet moving into positive territory from 3Q22’s -1% YoY and -0.3% QoQ.
JCI continued its short-term bullish to 6941.85, the most definitive Closing number since last December, supported by a Net Foreign Buy of IDR 266.28 billion, mainly on blue chips in the banking sector. Meanwhile, it turns out that foreigners have been diligently selling GOTO shares this week, releasing a nominal value of IDR 334 billion. If this buying continues, then JCI will likely be able to break the crucial Resistance of 6955-6965, letting JCI move to the psychological level of 7000s. On the other hand, this will confirm the bullish reversal Inverted Head & Shoulders pattern, which TARGET could ideally reach the all-time-high level of 7355-7377 again. Today, Indonesian stock market players will keep an eye on the Trade Balance (Jan.) data which is expected to come out at USD 3.35 billion, slightly lower than the Dec. level of USD 3.89 billion. NHKSI RESEARCH still suggests a gradual Average Up as the wisest portfolio management strategy, given the (less) conducive regional market sentiment.
Download full report HERE.