The Dow Jones closed up 1% on the back of energy stocks as oil prices surged after OPEC+ surprisingly announced a 1 million barrel/day production cut; while the technology sector only edged lower due to bargain buying. The prospect of rising fuel costs has raised concerns of additional inflationary pressures, especially after signs of softening goods & services prices began to emerge; hence the Federal Reserve cannot abandon aggressive monetary policy soon. Market participants are equally divided into two camps that count on a 25bps rate hike at the upcoming FOMC Meeting in May; or no hike at all, as reported by CME Fedwatch. Manufacturing PMI data for a number of countries including the US seems to be struggling in the contraction area, but not for Germany & the Eurozone which began to show growth even though it has not yet entered the expansion area line at 50. As for today, we will look forward to reports on German Trade Balance (Feb.), Factory Orders (Feb.), and the highlights of the day, which are: US JOLTs Job Openings (Feb.) that could shed light on how the economy has reacted to the rate hike so far, as well as how the Fed should continue this policy.

JCI started 2/2023 with a gain of 21.9 points / +0.322% to 6827.17, finally able to secure a position back above MA50; supported by safe and sound macroeconomic data. Inflation Rate (Mar.) fell to 4.97% YoY from 5.47% previous month; Core Inflation also tamed to below 3% (on track with central bank expectation) at 2.94% YoY, successfully lower than forecast and previous period. As for yesterday’s trading, it was quiet & relatively slow even though trading hours have been extended again as it was before the Covid pandemic hit, yet still managed to gather IDR 486.35 billion Foreign Net Buy. Considering the current sentiment in the market, NHKSI RESEARCH suggests to Average Up, given the good winds of rising commodity / natural resources prices, which is a hallmark of the Indonesian stock market character.

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