The US Monetary and Fiscal Authority released economic data, July FFR is projected to rise 75 bps and 2Q22 GDP is projected to grow 0.4% QoQ, making Wall Street closed mixed earlier in the week. Energy sector shares supported the Dow Jones 0.3% gain; offset the Nasdaq 0.4% decline ahead of Big Tech Quarterly Earnings. The strengthening of the energy sector is still influenced by ongoing concerns about supply shortages. US crude oil prices, both WTI and Brent contracts in September 2022, rose 2% to USD96.70/ Barrel and USD105.15/Barrel, respectively. There has also been an increase in natural gas prices, after Russia’s Gazprom will cut European gas flows via the Nord Stream to 20% due to maintenance issues. Meanwhile, the strengthening of the Financial sector occurred in line with the rally in a number of banking stocks, due to the slightly higher yield of UST.
Wait and See boosts safe-haven interest, FR91 yield drops 9 bps. Investors are waiting for the results of the FOMC meeting on Thursday morning, pushing JCI to only record transactions worth IDR 9 trillion yesterday. JCI closed down 0.4% to a level of 6,858 points, having previously touched the psychological level of 6,900 in the first trading session. Meanwhile, the Technology sector fell 3.3% and Transportation and Logistics fell 1.9%. Meanwhile, investors are interested in safe havens, causing SUN FR91 to record a yield decline of more than 9 bps, or the deepest decline compared to other benchmark series which fell in the 4 bps to 8 bps range. Investors are watching the potential for an increase in the FFR for the July period, amid BI’s Dovish stance that maintains the BI 7DRRR at its lowest level of 3.50%.
Download full report HERE.