Dow Jones closed in the red, along with the S&P 500 and Nasdaq, as policymakers failed to reach an agreement on the US debt ceiling. The lack of progress comes just days ahead of June 1, as feared by US Treasury Secretary Janet Yellen, although both US President Joe Biden and Republican McCarthy have touted optimism about reaching a deal soon to avoid a default. In terms of interest rates, about 88% traders continue to believe that the Fed will pause the rate hike at the next FOMC Meeting in June, as reported by the Fed Rate Monitor Tool. From Asia, Japan reported PMI moving in an expansionary direction for the first time in 7 months, indicating the first improvement in business conditions since October 2022; coupled with BoJ Core CPI creeping up 3% YoY. South Korea’s Consumer Sentiment (May) has also climbed to its highest point this year, advancing to 98 (compared to 95.1 a month ago). Similarly, the US & Germany announced Composite PMI (May) which both became more expansionary at readings of 54.5 & 54.3 respectively; in contrast to the Euro Zone & UK which showed contracting manufacturing & services activity with readings of 53.3 & 53.9 respectively. The US also reported a declining Building Permits number at 1.147 million (-1.4% MoM); on the other hand, there were more New Home Sales (Apr) than expected & the previous period at 683 thousand, a sign that demand for housing for small families is still high. As for today, market participants will pay attention to UK Inflation data which is expected to move from the double-digit level of 10.1% to 8.3%. The German Ifo Business Climate Index (May) will shed more light on the business climate picture & business expectations for the next 6 months, from surveys spread across the manufacturers, builders, wholesalers & retailer sectors.

Indonesia released 1Q23 Balance of Payments data at USD 6.5 billion, higher than USD 4.7 billion in the previous quarter. Meanwhile, the Current Account managed to post an increase in surplus to USD 2.97 billion in the first 3 months of this year from USD 550 million in the same period last year, maintaining 7 consecutive quarters of gains and equivalent to 0.9% of GDP. NHKSI RESEARCH predicts JCI still needs more encouragement to break the important Resistance of 6760-6785, which has been attempted to be broken for 2 days now, in order to end this short term downtrend and further bearish threat towards 6560-6550. Indonesian investors/traders are advised not to add too many positions while waiting for a confirmed break out to occur.

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