Today’s Outlook:
• The US stock market was closed due to the President’s Day holiday (Washington), but it did not dampen market participants’ interest in other regional markets, as well as highlights around important world sentiments. The Trump administration’s latest plan for fair and reciprocal tariffs (RECIPROCAL TARIFFS) has been unveiled. The plan asks agencies to develop specific tariff proposals, reporting on other countries’ tariff and non-tariff barriers due by April 1. The US Trade Representative (USTR) and the Department of Commerce will initiate investigations. Analysts expect the economic impact of the proposed reciprocal tariffs to have little impact on US GDP and an increase in Inflation. The White House has hinted at specific tariffs around products such as EU cars, Brazilian ethanol and Indian motorcycles. Nonetheless, the overall impact on major US trading partners may be limited due to free trade agreements and retaliatory structures, such as those in place with China. The Trump administration also emphasizes non-tariff barriers, particularly value-added tax (VAT), which introduces additional complexity to the potential policy outcome.
• MARKET SENTIMENT: Patrick Harker, President of the Federal Reserve Bank of Philadelphia, said that the tight monetary policy of the US central bank is still well positioned as officials await further developments regarding inflation. Harker highlighted the resilience of US economic growth and production, as well as balanced labor market conditions; justifying the higher for longer policy. However, he is optimistic that inflation will continue to cool, allowing interest rates to decline in the long run. Harker also noted that January inflation has usually been higher than expectations over the past decade. Today when the market reopens, market participants will hear a statement from another FOMC member, Mary Daly.
• ASIA & EUROPE MARKETS: JAPAN reported Q4 GDP that strengthened quite sharply to 2.8% yoy, almost 3x higher than the 1.0% forecast and also solidly above the previous quarter’s 1.7%; although Industrial Production (Dec) did not actually make it out of the contraction zone as expected.
• – CHINA’S market recovery continues, with Hong Kong-listed tech stocks hitting a 3-year high on Monday as President Xi Jinping met with top tech leaders in Beijing. The Hang Seng technology index is up more than 30% in a month. The symbolism of Xi’s rare meeting with tech leaders is powerful, reflecting policymakers’ concerns over China’s economy and tech development, and marking a sharp turnaround over the regulatory crackdown on tech 4 years ago. GOLDMAN SACHS has increased its target for MSCI China with a potential 12-month upside of 16%-19%, citing the impact of China’s newly launched artificial intelligence (AI) model, DeepSeek-R1, and other competitive and cost-effective AI technologies from China.
• – EUROPEAN stocks rose to their highest level on Monday, led by the Defense sector, as the region’s political leaders called for an emergency meeting on the Ukraine war, amid growing US intentions to increase military spending for security. The pan-European STOXX 600 index was last up 0.4%, on the back of Defense and Aerospace stocks jumping nearly 4% to an all-time high, after more than doubling in value since Russia invaded Ukraine three years ago.
• – FRANCE President Emmanuel Macron on Monday hosted an emergency meeting on Ukraine, albeit after US officials said Europe would have no role in any talks this week in Saudi Arabia aimed at ending the conflict. Britain said it was prepared to send peacekeepers to support any deal, while RUSSIAN and US officials prepared to meet for their own talks on Tuesday in Saudi Arabia. UKRAINE President Volodymyr Zelenskiy said on Monday that the country would not recognize any decisions made in deliberations where they were not present.
• – This week will be filled with important data releases, including global business activity data for February; while in Europe markets will also be paying close attention to the GERMAN general election later this week.
• CURRENCY & FIXED INCOME: The EURO was slightly down 0.2% around $1.05, while the DOLLAR slipped nearly 0.6% to 151.46 YEN. POUNDSTERLING held steady around $1.2593, just below its highest level in 2 months, as investors look forward to employment and inflation data later in the week.
• – Surging JAPAN GDP not only bounced the Yen, but also increased the probability of interest rate hikes after decades of deflation & ultra-loose monetary policy. The 2-year and 10-year JGB (Japanese Government Bonds) yields are already at their highest since 2008 and have risen sharply in recent months, almost doubling since September. These are big moves, and the impact on businesses, households and investors remains to be seen.
• COMMODITIES: OIL prices rallied on Monday following an attack on an oil pumping station in the Caspian Sea that disrupted the flow of supplies from Kazakhstan to clients such as Chevron & Exxon Mobil, while traders monitored developments in a possible RUSSIA-UKRAINE ceasefire that could ease sanctions and boost global supply. On the other hand, OPEC+ said that the group has no plans to postpone a series of planned monthly oil supply increases scheduled for April, confirming Bloomberg News’ doubts whether OPEC+ was considering postponing the hikes.
• – DOLLAR INDEX, hovering near a 2-month low after weaker-than-expected US retail data for January, also boosted oil prices by making crude cheaper for non-US buyers. BRENT crude oil closed at $75.22 per barrel, up 48 cents. US WTI (West Texas Intermediate) crude rose 65 cents to $71.39 per barrel. The public holiday caused trading volumes to be relatively quiet.
• JCI successfully closed the 6830 GAP which can be categorized as Resistance, opening the question again today whether it is able to continue strengthening to the following TARGETS: MA20 / 6955 up to the psychological level of 7000. After last Friday’s IDR 1 trillion foreign sell-off, foreigners finally bought back the same amount, marking a new Foreign Net Buy after a while. The dropping DXY also helped the RUPIAH exchange rate to strengthen further to the 16205/USD level, a little more through 16170 then it is certain that Rupiah can breathe more freely towards 16000. NHKSI RESEARCH hopes that the domestic market can maintain more positive catalysts in order to keep bullish sentiment staying in the market and foreign funds returning inflow. One of them is the policy to support Indonesia’s economic growth in the 1st quarter / 2025 which President Prabowo just announced yesterday Monday at the State Palace. The policy consists of 8 main points including highlighting the distribution of social assistance, the disbursement of THR, the stimulus of the Eid Ramadan holiday, various economic stimulus such as electricity tariff discounts and automotive purchase subsidies, optimization of the Free Nutritious Meal (MBG) program and the distribution of KUR and rice harvesting
Company News
• UCID: December 2024, Uni Charm Achieves Net Revenue of IDR 9.67 Trillion
• BUAH: Segar Kumala Continues Expansion to Eastern Indonesia
• DRMA: TP Rachmat’s Issuer Boosts Sales of Three-Wheeled Motorcycles
Domestic & Global News
Prabowo Signs New DHE Policy, Entrepreneurs Propose Limited Implementation
EU to Implement CBAM in 2026, Tripping Indonesian Manufacturing Exports
Download full report HERE.
