Global stock markets were flat, searching for direction with Wall Street set to remain closed on Tuesday for the 4th of July holiday. The markets were looking for clues from economic data announcements. From South Korea, which reported CPI (June) at 2.7% yoy, below expectations and the previous month’s CPI as well. Germany announced a Trade Balance (May) surplus of EUR 14.4 billion, also lower than forecast and previous period. This morning South Korea has reported Foreign Exchange Reserves (June) at USD 421.45 billion (missed the prediction of USD 432.26 billion). The more crucial economic data may be data from Japan & China today where both are scheduled to release Services PMI (June) and Chinese Composite PMI. As it turns out, several major European countries such as France, Germany, Eurozone, UK will also publish their PMI (June) data in the afternoon WIB. The Eurozone will also monitor Inflation figures at the producer level or PPI (May) which is expected to be released at -1.3% yoy deflation, versus the previous period’s positive 1%. Later in the evening, US Factory Orders (May) data will be released with monthly growth expected to rise 0.8% mom, compared to April’s 0.4%. The tech world awaits the launch of Meta’s new service, Threads, on Thursday, which could be a rival product to Twitter to reach users who disagree with Elon Musk’s management style. Meanwhile, China has imposed a ban on the export of two important mineral materials in the manufacture of computer chips, gallium & germanium, starting next month, as their latest move in the semiconductor war with Western countries. Both metals are crucial in the manufacture of microchips, electric vehicles, military & communications equipment. On the other hand, the US is preparing to retaliate by cutting off China’s access to cloud services including from Amazon & Microsoft. In terms of commodities, global crude oil prices crept up 2% on Tuesday trading (04/07/23) as traders digested additional production cut decisions from Saudi Arabia & Russia triggered by signs of weakening global economic activity. As is known, Saudi Arabia has decided to increase oil production cuts by 1 million barrels/day starting in August, followed by Russia’s comments that it also plans to cut 500 thousand barrels/day.
JCI closed in negative territory or reduced by 14.96pts to 6681.75 level triggered by foreign net sell of IDR 125.54 billion with transaction value below IDR 8 trillion, most Asian stock exchanges also moved flat to down in response to a number of weak economic data. Indonesia has released Manufacturing PMI data (June) at 52.5, higher than the previous month at 50.3. This pace of expansion in the country’s manufacturing sector is one of the fastest increases observed over the past 1.5 years. The PMI figure is relatively strong as it is able to surpass the Asean Manufacturing PMI which only reached 51.0, even being able to outperform a number of major G20 countries such as China, the US, and Germany. Quoting S&P Global, the macroeconomic data release signaled an improvement in the health of Indonesia’s manufacturing sector for 22 consecutive months. Considering the rolling market sentiment and technical analysis view, NHKSI RESEARCH considers JCI consolidation yesterday to be a short support test where the low still rests on MA10 & MA20 support. However, Average Up advice should be waited until JCI is able to pass the short term Resistance of 6700 to be safe.
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