US stock markets are closed due to Memorial Day holiday, as well as the UK; causing Asian and Indonesian markets to move without guidance from regional markets today. Few clues from the US debt ceiling crisis that has touched USD 31.4trillion; it still seems to have a long way to go in order to get Parliamentary approval (especially from the Republicans). However, market participants seem quite optimistic that an agreement which relieves many parties will be reached before the US default due date on June 1. Meanwhile, there is still a debate whether the Federal Reserve will still raise interest rates for the 11th time at next month’s FOMC Meeting; or start to step on the brakes of this upward trend. Fed officials will still monitor important data from the labor sector such as Nonfarm Payrolls (May) which is scheduled to be released next Friday; where it is expected that there will be an increase in employment of 180 thousand in May, lower than 253 thousand in the previous month. This morning Japan has reported its Unemployment Rate (Apr.) which came out at 2.6% lower than forecast and previous period. Later today we will await Consumer Confidence (May) from the US & Euro Zone; a leading indicator to predict public spending which plays an important role in overall economic activity.
Considering the lack of sentiment from the commodity sector, NHKSI RESEARCH predicts that today Indonesian capital market investors/traders will have to rely on domestic catalysts or individual issuers. Although the JCI Closing position yesterday was pulled from its lowest point of 6618 and managed to close above Support 6660 with a long-leg Hammer-like candle (a sign of bullish reversal), it has not completely eliminated the threat of going down towards 6560-6550 as long as JCI has not managed to climb back at least above MA10/6705. Therefore the ADVISE remains to not be rash in buying too much, as yesterday’s Net Foreign Sell was recorded at IDR 424.56 billion, cutting the last 1 month of buying to only IDR 902.4 billion.
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