Wall Street was down 2%, in contrast with sloping PCE. NHKSI Research sees the July US Deflator PCE survey was down to 0.0% MoM (Vs. Jun. 1.0% MoM) and 6.4% YoY (Vs. Jun. 6.8% YoY), as the US Headline CPI peaked in June with 1.3% MoM and 9.1% YoY, indicating that the Fed has room to start easing its monetary policy. Meanwhile, Nasdaq led Wall Street’s decline, falling 2.5% as fears of continued Front Loading, or an FFR increase of 75 bps in September. Investors are also watching the Fed’s plans to reduce its nearly $9 trillion balance sheet, a process that began last June.
The increase in subsidized fuel prices Pertalite and diesel will push inflation higher in September. At the beginning of the week, JCI consistently moved in the Red Zone, before finally closing down 64 points. Investors responded relatively negatively about the Government’s plan to increase the price of subsidized Pertalite fuel, directly affecting the inflation rate, which in turn may reduce people’s purchasing power. The JCI’s pressure was also influenced by the depreciation of the Rupiah, which returned to near the level of IDR14,900/USD. Meanwhile, investors are also waiting for the results of this Tuesday’s RDG, projected to maintain the BI 7DRRR in August at the level of 3.50%. NHKSI Research projects JCI will move Bearish (continued consolidation), with Support: 7.064-7.050 / 7.020-7.000 / 6.930 and Resistance: 7.125 / 7.174 / 7.185 / 7.230.
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