After a 50bps hike in May, investors expect the June Fed Funds Rate (FFR) to rise to 75bps. The speculation pressured Nasdaq down to 3.95%, its lowest level since December 2020. CME Group’s FedWatch says there is a 75% probability that June’s FFR will rise to 1.50%-1.75%. The Fed’s tight monetary policy poses the risk of an economic slowdown amid high US inflation. The risk of stagflation makes investors begin to look at safe-haven bonds. The pace of rising US Treasury yields was restrained, with yields on UST10Y down 18Bps and UST30Y down 12Bps, compared to the weekend.

Foreign investors recorded a net buy of IDR 19.4 trillion, while JCI corrected to the level of 7,161 yesterday. JCI finally closed up 0.2% to 7,232, amid the government’s confirmation that Crude Palm Oil is not included in the palm oil products that are prohibited for export. In more detail, the export ban is only for Refined, Bleached, Deodorized (RBD) palm olein products. NHKSI Research projects that the JCI will move upward today to the level of 7,200-7,300.

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