Today’s Outlook:
• US & UK MARKETS are closed on Monday (27/05/24) due to the Memorial Day holiday, so traders are debating what the EUROPEAN CENTRAL BANK will decide on June 6. The European Central Bank (ECB) may have room to cut interest rates as their inflation trend slows, but it will take longer to ease policy further. While the ECB seems to have promised a rate cut on June 6, what market participants need to think about now is what their next move will be and the pace of the rate cut; making market participants re-evaluate their expectations to bet on only one more rate cut this year. ECB officials expressed that they need the flexibility to decide on a meeting by meeting basis and based on economic data monitored from time to time. EUROZONE Inflation figures will be released respectively on Friday (after GERMANY announced their CPI first on Wednesday) where economists believe the consensus of up to 2.5% will not stop the ECB from easing monetary policy next week.
• ASIAN & EUROPEAN MARKETS: Most Asian stock markets rallied on Monday, recovering from the fall seen last week, while anticipating further clues on US inflation and interest rates in the coming days. Data on Monday showed CHINA’S industrial sector profits grew at a steady pace in April compared to the previous month. But reduced optimism over recent stimulus measures from Beijing kept gains in the Chinese market limited. Meanwhile in continental Europe, GERMANY is still somewhat pessimistic about the business climate for the next six months, as evidenced by the German Ifo Business Climate index (May) which remains flat at 89.3, the same as the previous month.
• COMMODITIES: GOLD prices edged higher in Monday’s trading, slightly rebounding from last week’s price collapse as traders anticipated the metal’s market movements ahead of this week’s key US Inflation-related benchmark index readings. Price strength was followed by other precious metals such as Platinum (+1.2%) and Silver (+1.7%), as well as industrial metals such as 1-month COPPER futures up +0.3%, rebounding after collapsing from last week’s record highs. Gold spot prices are up 0.4% at USD 2343.23/ounce, also rebounding after collapsing from last week’s record high of USD 2450. Traders’ focus is on whether the physical copper market is as tight as expected; and whether supply will remain stable in the coming months. The market is also awaiting more cues from major copper importer CHINA, especially regarding how the Chinese government plans to fund and implement its recently announced stimulus measures; in addition to focusing on the US PCE price index data due on Friday. From ENERGY commodities, OIL prices appreciated 1% in slow trading due to holidays in the US & UK, after going through a sluggish market last week due to unclear US interest rate prospects related to their seemingly intractable inflation. BRENT’s July contract closed up 1.2% at USD 83.12/barrel, while US WTI futures gained 93cents to USD 78.65/barrel. Both Brent and US WTI experienced price slumps of 2% and 3% last week as the Federal Reserve meeting minutes were published which showed that it is not impossible for US central bank officials to raise interest rates again if Inflation handling seems stagnant. The OPEC meeting scheduled for June 2 online will also play an important role in determining the future of Oil prices as they will negotiate the decision to extend the existing voluntary production cuts by 2.2 million barrels. Meanwhile, Goldman Sachs on Monday raised its global oil demand forecast for 2030 and expects consumption to peak in 2034 due to a potential slowdown in the use of electric vehicles, keeping refineries operating at higher-thanaverage levels until the end of the decade.
• INDONESIA capital market investors & traders are waiting for the end of JCI consolidation while testing MA10 & MA20 Support around 7190-7170. JCI needs to break back above the nearest Resistance which is MA50 / 7235 in order to create a new upward swing. NHKSI RESEARCH suggests Average Up or re-position Buy when it happens, simply to be on the safe position.
Company News
• BTPN: Lending IDR100 Billion
• IRRA: Sales Increase 52%
• ERAL: 1Q24 Sales Hit IDR1.09 T
Domestic & Global News
Indonesia at Risk of CPO Deficit if Prabowo’s B50 Program Implemented
Japan Makes Efforts to Combat Yen Weakness at G7 Finance Ministers Meeting
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