The Dow Jones ended lower for a fourth-straight day as US debt ceiling talks reached a stalemate which stoked worries about a potential US default for the first time in four decades, right on June 1 as its deadline. Dow Jones led the way down by falling 0.77%/255 points; while 10 out of 11 S&P sectors moved into negative territory, except for the Energy sector which received a good wind from the OPEC+ production cut plan, plus the release of US Crude Oil Inventories data, which surprisingly fell far below expectations, dropping by 12.456 million barrels. The CBOE Volatility Index, also known as the Wall Street “fear” index, rose to around a 3-week high. The outlook on interest rates from the Federal Reserve also became market participants’ focus. The release of the Fed Meeting Minutes from the last meeting on 2-3 May, showed that most Fed officials think that there might not be a need to raise interest rates again at the upcoming FOMC Meeting on 13-14 June (as expected by investors); although a pivot (rate cut) is also not likely to happen considering that there are not enough strong reasons to end the trend of tight monetary policy. From Europe, the UK managed to record a decline in April Inflation to 8.7% YoY, finally leaving the previous month’s double digit rate of 10.1%; however, on a monthly basis, UK CPI still recorded a rise of 1.2% MoM, higher than forecast & previous period of 0.8%. Meanwhile, they managed to significantly reduce the PPI Input, or the price of raw materials paid by manufacturers; a leading indicator of consumer price Inflation. The German Ifo Business Climate Index (May) could not be more optimistic about the business climate for the next 6 months as the reading was released at 91.7 (lower than forecast & previous period which was around 93). Today the German 1Q23 GDP figure will be awaited; from the US the 1Q23 GDP and Initial Jobless Claims will be announced where it is predicted that the number of jobless claims will come out at 250 thousand, up from the previous week at 242 thousand. The US will also await Pending Home Sales (Apr.) data where growth of 0.5% is expected, which is significantly higher than the previous month’s decline of -5.2%.
Bank Indonesia re-appointed Perry Warjiyo as BI Governor for the second term. The volatile market situation managed to close the JCI in positive territory, or up 0.14%/9.12 points although still below the safe level at least above 6765 (up to 6785). NHKSI RESEARCH still advises Indonesian investors/traders not to rush to add positions, before the Resistance level is confirmed to be passed.
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