Today’s Outlook:

• The Dow Jones Industrial Average dropped 275 points, or 0.6%, building on Monday’s plunge of nearly 650 points. The S&P 500 shed 0.3%. Both curbed earlier losses, with the Dow falling more than 840 points and the S&P 500 sliding 2% at session lows. All three indexes has plunged in morning trading as investors initially responded to the U.S.′ 25% duties on Canada and Mexico that took effect at midnight. Trump also slapped an additional 10% tariff on Chinese goods. China retaliated = with additional tariffs of up to 15% on some U.S. products, while Mexican President Claudia Sheinbaum said the U.S.′ southern neighbor would respond with tariffs that would be announced this weekend. After Canadian Prime Minister Justin Trudeau said his country would also put a 25% levy on U.S. goods, Trump said in response that he would add even higher tariffs on the country.

• MARKET SENTIMENT : For Wednesday, there is a flurry of significant data publications in the US: (1) February ADP Nonfarm Employment Change; (2) February S&P Global Services PMI; (3) February ISM Non-Manufacturing PMI; (4) February ISM Non-Manufacturing Prices; and (5) Crude Oil Inventories.

• FIXED INCOME: The 10-year Treasury yield edged higher on Tuesday as U.S. President Donald Trump’s tariffs on Canada, Mexico and China went into effect, escalating fears of a global trade war. The benchmark 10-year Treasury yield rose close to 2 basis points to 4.199%, reversing course after dropping earlier in the day. The 2-year Treasury yield slid around 4 basis points to 3.937%. One basis point is equivalent to 0.01%, and yields and prices move in opposite directions. The U.S. dollar index was 0.8% lower than late Monday’s levels in mid-morning U.S. trade at 105.93, hitting its lowest since December 6. The dollar fell to a three-month low on Tuesday as concerns about slowing growth and the impact from tariffs on the U.S. economy outweighed any potential boost from new levies on Canada, China and Mexico.

• EUROPE : The Stoxx 600 index provisionally closed 2.2% lower, marking its biggest daily drop since August last year. The Stoxx 600 basket of automotive stocks — one of the sectors expected to be most impacted by the new duties — fell 5.7%.

– The euro was up 0.8% at $1.057, and hit its highest since December 10 at $1.0559, reflecting the lack of tariffs so far on the European Union and a narrowing of the gap between U.S. and euro zone bond yields, which has made the dollar less attractive. Euro zone government bond yields have risen relative to those in the United States as Trump’s pullback from supporting Ukraine has stirred expectations of higher borrowing and spending on defence. Yields move inversely to prices. Investors also await the European Central Bank policy meeting on Thursday, with traders pricing in another 25 basis-point cut.

• ASIA : Japanese stocks led declines in Asia-Pacific markets, after U.S. President Donald Trump made it clear that tariffs on Mexico and Canada would go into effect as planned. The benchmark Nikkei 225 index plunged 1.20% to end the day at 37,331.18, while the broader Topix index lost 0.71% to close at 2,710.18. Japan’s  employment rate for January came in at 2.5%, slightly higher than Reuters’ estimates of 2.4%. South Korea’s Kospi index ended the day 0.15% lower at 2,528.92, while the small-cap Kosdaq retreated 0.81% to 737.90. The country’s retail sales for January fell 0.6% from the previous month. Revised estimates show a rise in the 0.2% rise in the metric in December. Hong Kong’s Hang Seng index was down 0.16% in its last hour of trade. Investors kept a watch on Chinese stocks as the mainland kicks off its annual parliamentary gathering, known as the “Two Sessions.” Mainland China’s CSI 300 index ended the day flat at 3,885.22. Australia’s S&P/ASX 200 ended the day 0.58% lower at 8,198.10. The country’s retail sales for January rose 0.3% in line with Reuters estimates. Retail sales had declined 0.1% in December. Indian’s benchmark Nifty 50 was trading down 0.28%, while the BSE Sensex index lost 0.27% as at 1.15 p.m. local time.

– The dollar weakened 0.4% to 148.92 yen. It bottomed at 148.07, its lowest since October 8. China’s yuan firmed to 7.265 per dollar, aided by the central bank continuing a strengthening bias in its daily official guidance.

• COMMODITIES : Oil prices fell to multi-month lows on Tuesday after reports of OPEC+ plans to proceed with output increases in April while further price pressure was applied by U.S. tariffs on Canada, Mexico and China as well as Beijing’s retaliatory tariffs. Brent futures were down 75 cents, or 1%, at $70.87 a barrel. The session low was $69.75 a barrel, its lowest since September. U.S. West Texas Intermediate (WTI) crude was off 28 cents a barrel, or 0.4%, at $68.09. The benchmark previously dropped to $66.77 a barrel, the lowest since November. OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, decided on Monday to proceed with a planned April oil output increase of 138,000 barrels per day, its first since 2022. GOLD was up 0.7% at $2,914 an ounce. Bullion has gained more than 11% so far this year and hit a record high of $2,956.15 on February 24. Gold prices rose on Tuesday, driven by a weaker dollar and heightened safe-haven demand amid escalating trade conflicts following U.S. President Donald Trump’s imposition of new tariffs.

• JCI corrected -2.14% to 6380. NHKSI anticipates JCI to be at a sideways trend below 6500 as a solid resistance and 6000 as the next base support after breaking out of its previous solid support at 6393. On Tuesday, there was a more cheery note with Net Foreign Buy of IDR 308 bn in the regular market. As USD/IDR is set to be hovering around IDR 16,600-16,300 for the medium term, we view this to be a stable footing for Indonesia’s currency currently eventhough it indicates currency weakness amongst regional peers.

Company News

• PTRO: Expansion, PTRO to Issue IDR1.5 Trillion Bonds
• PANI: Soaring 131 Percent, Aguan’s Issuer Recorded Rp623.91 Billion Profit in 2024
• UNTR: United Tractor (UNTR) to Lego 60% of Subsidiary’s Mining Shares, Why?

Domestic & Global News
Coal Buyers from China Object to Indonesia Using HBA for Export Reference
China Raises Import Tariffs on US Goods, Xi Jinping’s Counter to Trump

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