Today’s Outlook:

• Wall Street fell more than 1%, the DJIA continued its 4 consecutive days of weakness and even the S&P500 posted its largest daily percentage decline since February 13 on Thursday trading (04/04/24), triggered by a cautious approach by the Federal Reserve regarding US monetary policy, as well as an important labor report this Friday. Market participants also digested statements from US President Joe Biden, who continued to voice the idea of a Gaza War ceasefire to Israeli Prime Minister Benjamin Netanyahu; which lifted Oil prices due to this increased geopolitical tension. Fed officials are clamoring for a more hawkish tone in determining this year’s rate cut decision, even the most extreme heard is that if the US Inflation rate doesn’t come down from current levels then maybe the pivot doesn’t need to materialize. The sentiment extinguished the market gains that had previously occurred on the back of US Initial Jobless Claims data that increased above expectations. The number of Americans filing jobless claims rose by 9k to 221k for the week ending March 30th; this was above the estimate of 214k and suggests the labor market is easing. Although this is one data that supports the view of a rate cut this year, investors are still expected to be somewhat nervous waiting for the pre-Nonfarm Payroll report this Friday at around 19.30 WIB which is predicted to spawn a figure of 212 thousand for March, lower than 275 thousand in February. The US Unemployment Rate is also not expected to budge from 3.9%, while the increase in average hourly wages is expected to rise by 0.3% mom in March, so higher than 0.1% in the previous month. In light of all this, there is still a 60% chance of the first rate cut happening in June, according to the CME Group FedWatch Tool survey. GEOPOLITICAL TENSIONS IN THE MIDDLE EAST also seem to be escalating. Both Israel and Iran have vowed to fight each other and retaliate against each other’s attacks.
• COMMODITIES: Based on the two sentiments above: as the prospect of another interest rate cut became unclear and the Gaza War escalated, coupled with the worst earthquake in 25 years in Taiwan, this inevitably sent the spot price of GOLD as a safehaven asset crawling up to a new record point, briefly touching USD 2302.58/ounce before closing at USD 2292.19/ounce. Even the June contract price ended higher at USD 2312.15, after touching a new high of USD 2322.25/ounce earlier this week. Even after this all-time-high price, analysts estimate that Gold still has the potential to rise further towards USD 2400 – 2500 / ounce this year. OIL prices were also on fire, with BRENT futures for June closing up 1.5% to above USD 90/barrel for the first time since October, while US WTI futures for May closed up 1.4% at USD 86.59/barrel. Both benchmark prices are at their highest point since October and continue to advance after market, driven by sentiment of escalating Middle East conflict and potential global supply constraints; after last week OPEC+ including Russia had agreed to maintain their previously reduced production levels in Q2.
• EUROPEAN & ASIAN MARKETS: GERMANY and EUROZONE report their Composite PMI & Services PMI moving further towards expansion, UK also managed to keep their PMI in the same region. Eurozone reported PPI (Feb.) which is still suffering from – 8.3% yoy deflation, worsening from -8.0% in January. Today will see the health of the property sector in relation to Construction PMI in the UK, along with Factory Orders and also Construction PMI from Germany; not forgetting Retail Sales from the Eurozone. For the ASIA region, JAPAN has this morning announced that their household spending managed to increase significantly for February, rising to a positive 1.4% mom exceeding expectations, and moving from the previous month’s negative -2.1% level. On an annualized basis, Household Spending which was -6.3% in January, the pace of decline was greatly reduced to a mere -0.5% yoy in February.
• Investors in INDONESIA will be monitoring the Foreign Exchange Reserves (Mar.) figure on the last trading day before the long Eid holiday, compared to the previous position of USD 144 billion in February. JCI lifted its sentiment by stabilizing in positive territory throughout Thursday’s trading and closed up 1.22% to 7254.4 level although this gain has not been supported by foreign net buy figure which recorded still net sell of IDR 469.6 billion in all markets. NHKSI RESEARCH expects today’s trading pace to be slower than usual and it is not impossible that it will be hit again by profit-taking, although there may be trading opportunities in commodity sectors such as oil & gold which prices are appreciating.

Company News

• IMAS: Net Profit IDR632 Billion
• BNGA: Bank CIMB Niaga Dividend Schedule
• BWPT: Profit Soars 913%

Domestic & Global News
• Moeldoko’s Blunt Talk about the Brunei-IKN Fast Train Project
• US Trade Balance Deficit Widened to US$68.9 Billion in February 2024

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