Soaring mortgage rates put pressure on US properties, as credit purchases dominate. Property which is very sensitive to changes in interest rates weakened as the Fed’s Hawkish. June 30-year mortgage rates were almost 6%, up from 3.3% at the start of the year. US Housing Starts data June MoM fell -2.0% (Surv. +2.0%), to as much as 1.6 Million units. House construction permits, Building Permits, June MoM fell -0.6% (Surv. -2.7%), indicating the property market is cooling down. Meanwhile, Wall Street gained significantly, with the Nasdaq going up more than 3%. Along with US Big Banks, a number of companies reported Earning Results that exceeded market expectations, amid fears of high inflation and the Strong Dollar potentially weakening the company’s 2H22 performance.

The USD weakened ahead of the Fed’s aggressive Hawkish at the end of July, along with fears of a potential US recession. The US Dollar Index DXY closed lower at 106.68 or away from its highest level of 108.54 last week. Yesterday, JCI was down 0.5% in early trading, before finally closing up 1.2% to 6,736. Meanwhile, Energy and Basic Materials led the sectoral gains, up by 3.4% each. As rupiah is stable around the IDR15,000/USD level and foreign flow is monitored, NHKSI Research project that the JCI will move upward in the range of 6,650-6,800, on the first day of the BI RDG this Wednesday. A number of parties project that BI will maintain the BI 7DRRR at the level of 3.50% and continue normalizing liquidity by increasing the reserve requirement to 9% in September.

Download full report HERE.