Manufacturing activity slowed, giving the Fed room to be Dovish in September. Data shows US June ISM Manufacturing fell to 53.0 (Vs. May 56.1). Reduced demand in the face of high inflation was also seen in ISM New Orders and Prices Paid which fell to 49.2 (Vs. May 55.1) and 78.5 (Vs. May 82.2). The ISM suggests the economy is cooling, and sees inflation has passed its peak, allowing the Fed to start Dovish after July’s 75 bps FFR hike. In addition to manufacturing data, investors are starting to anticipate the Earning Season 2Q22, and the unemployment rate. Meanwhile, Wall Street strengthened on Friday, ahead of the long holiday weekend commemorating Independence Day.

Rupiah Depreciation and Foreign Outflow in June. In addition to the payment of USDdenominated debt and an increase in imports of raw materials, the absence of the June Global Bond issuance based on DJPPR data, has the opportunity to put capex under pressure again, after booking at USD135.6 billion in May. Meanwhile, capex data was released Thursday morning, after the FOMC Meeting Minutes Results in the morning. The steady movement of capex provides room for BI as rupiah approaches IDR15,000/USD. The closing of the Wall Street Stock Exchange on Monday is a weighing sentiment, and NHKSI Research project the JCI to move upward (rebound) in the range of 6,700-6,960.

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