The rising yields have weighed the stock market, amid the Earning Results season. UST10Y yields again surpassed the 4% level or reached their highest level since 2008, as housing data has not been able to withstand the Hawkish stance of the Fed. Data shows that US Housing Starts on Sept. rose as much as 1.4 million (Vs. Aug. 1.6 million); affected by the high Mortgage Rates, in line with the increase in FFR during 2022. Furthermore, the Fed is expected to increase the FFR by 75 Bps for the fourth time in a row at the FOMC meeting next November.
Investors anticipate the Hawkish of BI 7DRR. BI’s decree revises the inflation target to 6.3% YoY; or 30-40 Bps lower than the previous target, which is 6,6%-6,7%; indicating the potential for BI’s tight monetary policy to continue for the rest of the year. In addition to the Inflation of Indonesia’s Headline Oct., which has approached 6% on an annual basis and exceeded 1% on a monthly basis, BI should also anticipate Strong Dollar sentiment, with DXY holding at a high level of 113 points (Vs. Highes Level 114), ahead of the discourse of an increase in FFR +75 Bps in early November. The high global uncertainty has made investors interested in the USD’s safe haven, making the Rupiah close to the level of IDR 15,500 this week.
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