Risk-Off stocks, Risk-On bonds, investors focus on economic recession. Wall Street stocks consistently move in the Red Zone, with a technical rebound on UST2Y, the bond that is most sensitive to changes in FFR, after approaching the psychological yield level of 4%. Meanwhile, US consumer inflation expectations fell, dampening speculation of a Sept FFR hike. +100Bps (Vs. +75Bps). The data show the U. of Mich. Sept. 1Y and 5Y-10Y Inflation eased to 4.6% (Vs. Aug. 4.8%) and 2.8% (Vs. Aug. 2.9%), as gasoline prices normalized. In addition to the benchmark mismatch (Lagging Vs. Leading Indicators), NHKSI Research sees the Fed’s continued aggressive Hawkish, potentially bringing the US economy at recession risk.

Monday to Thursday. The absence of economic data releases on Monday made investors immediately anticipate the Hawkish projections of three Central Banks on Thursday (WIB), namely: BI +25Bps (4.00%); BoE +50Bps (2.25%) and the Fed +75Bps (3.00%-3.25%). NHKSI Research sees BI’s tight monetary policy in September in particular, will determine the direction of JCI movement ahead of the 3Q22 closing, as well as make the 4Q22 economy expensive. The 4Q22 economic recovery faced the Dual Combo challenge, namely high inflation and interest rates. We project the JCI to move Bearish with Suppor ranget: 7,160-7,150 / 7,050-7,000 and Resistance: 7,200 / 7,250 / 7,300 / 7,355-7,377.

Download full report HERE.