Resilient Consumers keep inflation high. The accumulation of savings during the Covid19 pandemic, and rising wages amid a solid labor market, helped people cope with high inflation and Borrowing Costs. Data showed that Retail Sales Advance AS Oct. MoM grew 1.3% (Vs. Sept. 0.0%), indicating consumer spending increased at the beginning of 4Q22. A Resilient Consumer has a chance to keep the Fed on a Hawkish path at the upcoming Dec. FOMC, which weakens Wall Street. Additionally, high FFR has slowed down industrial production activity again, with US Industrial Production in Oct. MoM at -0.1% (Vs. Sept. 0.1%).
The survey result is balanced and BI is projected to raise the BI 7DRR Nov. by 25Bps or 50Bps. Additionally, the technology sector strengthened by more than 1% amid the JCI, which closed down by 21 points. The increase in BI 7DRR 50Bps, or Front Loading, signaled that BI’s stance remains Hawkish to restrain rupiah depreciation. On the other hand, Trade Balance Surplus in Oct. rose significantly to +USD5.6 billion (Vs. Sept. +USD4.9 billion), leaving room for BI to maintain Rupiah volatility and make BI raise the BI 7DRR by 25Bps only. While waiting for the BI RDG results this afternoon, NHKSI Research projects that today’s JCI tends to move sideways.
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