The Asian market, with Indonesian market in particular, can expect that last Friday’s US financial market excitement will be able to boost market sentiment this Monday. During last week, the Dow Jones and others posted hefty gains, varying in the range of 1.82%-2.04%; while the JCI ended the trading week with only three days in negative territory. The US employment data still showed growth (Nonfarm Payroll released at 339k, vs forecast 180k & previous 294k); however the unemployment rate has reached a 7-month high of 3.7% (vs 53-year low of 3.4% in April). This means that there is an increase in labor supply, which will eventually depress wage growth and inflation. It is evident that hourly wage growth during May was recorded to have weakened below expectations. This data brought relief to investors on their expectation that the Fed will have a strong reason to hold off on raising interest rates at the upcoming FOMC Meeting on June 13-14. The market has priced in a 71.3% probability, as reported by the CME Group FedWatch Tool. In terms of the US debt ceiling, the US Senate finally passing an agreement to raise the US debt ceiling which has reached USD31.4 trillion, provides the answer that market participants have been waiting for to avoid a catastrophic default. The CBOE Volatility Index, which implies the financial market fear index, finally deflated as well to its lowest point since November 2021.
Indonesia Inflation Data (May) is predicted to contribute positive sentiment today, if the estimate of 4.23% can be realized, then it means that the figure is down from the previous month at 4.33%. NHKSI RESEARCH is quite optimistic that the JCI Support test last Wednesday at the low point of 6562 will be the limit of limited downside potential that may still exist; in addition to the hope that JCI today will be able to move in positive territory, attempting to move up to the first Resistance which is MA10 6690-6700.
Download full report HERE.
