US stocks jumped on Monday (20/03/23) with Dow Jones leading a 1.2% gain on the back of investor relief after a deal to rescue Credit Suisse and central bank efforts to bolster confidence in the financial system. As is known, UBS has agreed to buy Credit Suisse for USD 3.23 billion in a merger engineered by Swiss authorities to avoid more turmoil in the banking group. Investors will focus on the Federal Reserve’s decision regarding interest rate hike on Thursday, with the market now pricing in a 71.6% chance of a 25 bps hike and a 28.4% probability of the Fed will hold its pace; as reported by CME Fed Watch. From Europe, German PPI (Feb.) explained that producer level inflation is still heating up above expectations of 14.5% YoY to 15.8% (although lower than the previous month: 17.6%). Eurozone Trade Balance (Jan.) posted a minus USD30.6 billion, a much higher deficit than forecast and previous. Meanwhile, this Germany ZEW Economic Sentiment (Mar.) data will be awaited, as it sheds light on the 6-month economic outlook, which is predicted to fall to 17.1 from 28.1 in the previous period. Later in the evening, the US Existing Home Sales (Feb.) report will be monitored to see if there is any significant growth to 5% MoM from -0.7% in the previous month.
JCI tumbled 1% / 65.75points to 6612.49 triggered by Foreign Net Sell of IDR 583.36bn; forming a Dark Cloud-like candle that overshadowed last Friday’s strong gains. Not much domestic sentiment is expected to affect the market as this trading week is relatively short due to a two-day holiday on 22- 23 March for Nyepi and the first day of fasting. NHKSI RESEARCH expects trading to remain slow as Indonesian capital market investors/traders avoid building up too many portfolio positions this week, to prevent being exposed to regional market volatility.
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