Manufacturing resilient, ready to hold back the Hawkish Fed. Data for May showed an increase in the Core Cap. Good Orders 0.5% (Vs. Surv. 0.2%); Core Cap. Good Shipments 0.8% (Vs. Surv. 0.2%); and Durable Goods Orders 0.7% (Vs. Surv. 0.1%). This performance far exceeded market expectations, following the 150 bps FFR hike during 1H22, indicating that the manufacturing sector is strong enough to hold higher interest rates again in 3Q22. For the record, the contribution of the manufacturing sector is 12% of the economy. Earlier in the week, the Dow Jones and S&P 500 were in the green, before finally closing down -0.2% and -0.3%, respectively.

The decline in the second session pushed NHKSI Research project the JCI to move upwards (rebound) today, within a range of 7,000-7,150. The JCI’s movement contrasted slightly with the appreciation of rupiah to IDR 14,800/USD and the 15 bps yield decline on GIDN10Y to 7.25%. We also see that investors tend to take a wait and see attitude ahead of the release of inflation data for June which is projected to reach 4% YoY on Friday.

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