Renewed unease gripped the world market on Wednesday (15/03/23) as news that Credit Suisse’s largest investor said it could not provide the Swiss bank with more financial assistance and increase its stake above 10%. This news sent Credit Suisse shares tumbling 24.2% to their lowest point in history. However, all three US stock indexes managed to recover from their lows to close down less than 1% (Nasdaq even edged up 0.05%) after the Swiss National Bank announced its full support to Credit Suisse. The recent turmoil in the bank sector has raised 50% of the market expectation that the Fed Reserve will not raise interest rates at all at the upcoming March 21-22 FOMC Meeting. Furthermore, US producer-level inflation (PPI) data (Feb.) contracted unexpectedly to minus 0.1% (from forecast & previous of 0.3%); while Retail Sales (Feb.) also slipped by a larger-than-expected – 0.3% to -0.4%. Other important data from the US today will be Building Permits (Feb.), Initial Jobless Claims and the Philadelphia Fed Manufacturing Index (Mar.) to monitor for further signs of recession. From Europe, the ECB will determine the interest rate decision, where the consensus still calls for a 50 bps hike.
JCI was dragged back to negative territory in the second session of Wednesday’s trading. However, it briefly attempted to go above Resistance 6700, slipping 13.68 points / -0.21% to 6628.14, but yesterday’s Net Foreign Buy managed to capture IDR 1.31 trillion. Indonesia’s Trade Balance (Feb.) again posted a surplus of USD 5.48 billion, significantly above expectations of USD 3.27 billion. China’s economy began to rise, as evidenced by the report of China’s Industrial Output (Jan.-Feb.) rose 2.4% YoY, higher than 1.3% in December. China’s Retail Trade (Jan.-Feb.) also expanded 3.5% YoY compared to the -1.8% fall last Dec. Today, Indonesian traders will closely monitor the decision of the BI Board of Governors’ Meeting (RDG BI), which will determine the BI7DRR benchmark interest rate that is expected to remain at 5.75%. NHKSI RESEARCH estimates that the bottom of JCI is near, considering the volatility of yesterday’s trading turned out to bring up an Inverted Hammer-like candle (bullish reversal) right when the RSI has also entered Oversold territory. Anticipate technical rebound with a gradual buying strategy on blue chip stocks that have touched their support level.
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