The Dow Jones and others closed lower on Friday (14/04/23) as a barrage of mixed economic data appeared to affirm another Federal Reserve interest rate hike, dampening investor enthusiasm after a series of big US bank earnings launched first-quarter reporting season and were able to make the S&P 500 banking sector soared by 3.5%. Industrial Production (Mar.) came in higher than expected at 0.53% YoY (vs. -0.9% forecast), with Michigan Consumer Expectations & Sentiment (Apr.) also looking more expansionary. These data show that the US economy is still quite buoyant, giving the Fed a reason to continue their upward trend in interest rates, even into June. Financial markets have priced in a 74% likelihood of that happening, according to CME’s FedWatch tool; causing 2-year US Treasuries to rally.
Two days before the Idul Fitri holiday for Indonesian investors, however, car sales data appeared to drop at 2.6% YoY compared to 7.4% in the previous period. As for today, the Trade Balance (Mar.) data is expected to come out at around USD 3.99 billion (indeed expected to be lower than the previous month at USD 5.48 billion). NHKSI RESEARCH expects JCI to still move slowly ahead of the long holiday, thus advise not to do positioning too aggressively; the strengthening position of Rupiah is prone to pullback, and the position of US stock index which is in the Resistance area also has the potential for trend reversal.
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