• US stocks rallied on Thursday (14/09/23) after stronger than expected Retail Sales pointed to a resilient economy even as inflation data came in hotter than expected. US Consumer Price Index increased by the most in 14 months in August as the cost of gasoline rose, but the annual rise in Core CPI was the smallest in nearly two years. The US central bank is still widely projected to keep interest rate at a range of 5.25% to 5.50% at next week’s FOMC Meeting, according to Investing.com’s Fed Rate Monitor Tool and CME FedWatch Tool surveys. Traders estimate there is a 97% chance for the Federal Reserve to keep rates in place on September 20 and a nearly 67% chance for a further pause in November. Given that Core Inflation has cooled below expectations, creating uncertainty over whether the Federal Reserve will opt to raise rates once more in either November or December. Citigroup expects the Fed to raise interest rates by 25 bps in November. Meanwhile, Inflation data at the producer level has also been released with a rise of 1.6% yoy in August, exceeding the estimate of 1.2%; and on a monthly basis, the PPI rose 0.7% mom, above the estimate of 0.4%. Complementing the same sentiment, Retail Sales (Aug.) managed to grow 0.6%, above the 0.2% forecast; while weekly jobless claims were also only released at 220k, lower than the 225k forecast. Closing the week, the US economic data will be released later tonight, namely: Industrial & Manufacturing Production (Aug.); and Michigan Consumer Expectations & Sentiment (Sept.) on how the University of Michigan views current consumer expectations and the business climate outlook for the next 6 months.
• European Markets: The European Central Bank has raised interest rates for the 10th consecutive time, to the highest level in history after policymakers saw that inflation was still too high for the Eurozone region, amid the fact that the region’s economic growth was also weakening. The Frankfurt-based ECB raised its benchmark interest rate by 25 bps to 4.5%, with marginal lending facility and deposit facility rates at 4.75% and 4.0% respectively. The ECB is still focused on lowering Inflation to their target level of 2%, given the fact that Eurozone Inflation is currently 2x higher than the target. Speaking of Inflation, later this afternoon (Indonesia time) there will be the release of French CPI data (Aug.), UK Inflation expectations, and wage growth in the Eurozone region for Q2/2023; as well as Eurozone Trade Balance (July). Market participants will also monitor what statement ECB President Christine Lagarde will issue in the afternoon.
• Asian Markets: Japan has announced Industrial Production in July which still grew negatively but the decline has started to slow down from before, even smaller than expected. China launched a stimulus move where China’s central bank said on Thursday (14/09/23) that it will cut the reserve requirement ration (RRR) or the amount of cash that banks must hold in reserve; for the second time this year to help maintain adequate liquidity while supporting the economic recovery. The Peoples Bank of China (PBOC) said it will cut the RRR for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points starting September 15. The move comes after the world’s second-largest economy struggled with economic recovery after the pandemic. To support the economy, the government has launched a series of policy measures in recent months, including measures to boost housing demand. Today, there are several important economic data that are also awaited from China, including: Industrial Production (Aug.), Retrail Sales (Aug.), and Chinese Unemployment Rate (Aug.) which are not expected to budge from the 5.3% level.
• Commodities: West Texas Intermediate (WTI) Oil prices have entered the USD90/barrel level and are steadily approaching the 10-month high of USD93.74/barrel in November 2022. Crude Oil prices have surged 30% since the end of June, as demand in the US & China began to increase amid production cuts from Saudi Arabia & Russia.
• JCI continued to rise after being supported by short term bullish support around 6930, but still need a bolder move to break resistance 6970 and return to 7000 waters. Closing above 7000 is what market players have been waiting for, which will end the Sideways trend since the beginning of this year. Investors will need to monitor Indonesia’s Trade Balance data for August, especially Export & Import growth. NHKSI RESEARCH sees that there are lots of trading potentials particularly in sectors that are facing bullish sentiment. Investors/traders can take advantage of the trading opportunity with the right sector rotation.
• ANTM : Ferronickel Plant Begins the First Metal Tapping Stage
• HRUM : Increase Shareholding in Subsidiary
• BNGA : Green Credit Portion Hits IDR32.51 Trillion
Domestic & Global News
• Social Commerce Regulation Targeted to Be Finalized by the End of September 2023
• China Loosens Bank Liquidity to Pump Economic Recovery
Download full report HERE.