Economic Data Fails to Assuage Market Worries. Starting the month of June, Wall Street markets closed lower. US ISM Manufacturing in May was at 56.1 (Vs. Cons.
54.5; Apr. 55.4) or increased faster, as demand for goods remained strong. However, some investors view that the economic data have not been able to pull the Fed out
of the discourse of aggressively increasing the FFR. Previously, the sentiment of rising cost of living made people more careful in shopping. The US Consumer Confidence of Conf. Board Index in May fell to a level of 106.4 from the previous month’s 108.6.
Effectiveness of 50 Bps FFR Increase. Entering June, investors are once again looking at the effectiveness of the Fed’s Hawkish stance, as US inflation for May period is
projected at 0.7% MoM, higher than the previous month’s inflation of 0.3% MoM. NHKSI Research sees that if US inflation has not slowed down, and the Fed reacts
more aggressively, it may potentially cause the market to fluctuate. Meanwhile, Indonesia’s May inflation is projected to be low at 0.41% MoM (Vs. Apr. 0.95%), or in
line with BI’s Dovish stance, becoming a positive sentiment today. We project the JCI to move upward, within a range of 7,050-7,250.
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