Today’s Outlook:
• The Dow Jones Industrial Average jumped about 485.60 points, or 1.14%. The S&P 500 gained 1.12%, while the Nasdaq Composite added 1.46%. All three indexes are still down more than 1% week to date even after these gains, however. Trump announced tariffs on key U.S. trading partners Mexico, Canada and China earlier this week, which have each since announced retaliation plans, fueling uneasy sentiment. Stocks have had a volatile week so far. The three major U.S. indexes staged a comeback on Wednesday after posting back-to-back losses. The White House said that it would grant a one-month delay for tariffs on automakers whose cars comply with the United States-Mexico-Canada Agreement. This fueled traders’ hopes that Trump could provide further exemptions, lifting the major averages.
• MARKET SENTIMENT : The European Central Bank (ECB) will be setting their March Interest Rate Decision and Deposit Facility Rate. In the US, initial jobless claims will be released. In Indonesia, Foreign Exchange Reserve numbers for February will be published.
• FIXED INCOME & CURRENCY : The 10-year Treasury yield advanced n Wednesday as investors considered the effect of President Donald Trump’s tariffs along with new data on U.S. private payrolls. The benchmark 10-year yield climbed about 7 basis points to 4.282%. The 2- year Treasury yield added almost 5 basis points to 4.003%. One basis point is equal to 0.01%, and yields and prices have an inverted relationship. The dollar index, with the euro as its largest component, fell 1.2% to 104.29 and hit its lowest since November 8. The greenback fell against most currencies, weighed down by an uncertain growth outlook driven by fears about the impact of tariffs on inflation and the economy. Investors are now starting to price in the potential for outright U.S. contraction, with traders on the prediction market Kalshi currently implying a 42% chance of a U.S. recession this year.
• EUROPE : The Stoxx 600 index closed 1% higher, following the broad downturn in global equities on Tuesday on tariff concerns. The Stoxx autos index, which tumbled nearly 6% in the previous session, rebounded by 2.4%. Utilities and food and beverage were among the sectors in negative territory. European stocks closed higher Wednesday amid optimism that U.S. President Donald Trump’s 25% duties on Canada and Mexico could be relaxed, and that German fiscal rules will be reformed to allow higher defense and infrastructure spending. German stocks were the top performers regionally, with Frankfurt’s DAX index closing up 3.5%. Top gainers included construction firm Hochtief, up 15.5%, manufacturer Kion Group, up 20%, the country’s biggest lender Deutsche Bank, up 12.4%, and Siemens Energy, up 8.6%. Regional defense names also continued their recent rally, with the Stoxx Aerospace and Defense index rising 2.7%.
– The euro climbed 4% this week, on track for its best week since November 2022, taking another leg higher after a late Tuesday announcement from the parties hoping to form Germany’s next government of the planned new fund and an overhaul of borrowing rules. The euro ascended to four-month highs on Wednesday against the U.S. dollar, as Europe’s growth prospects improved after Germany’s proposed 500 billion euro ($531 billion) infrastructure fund, potentially offsetting global trade tensions.
• ASIA : Asia-Pacific markets were mostly higher Wednesday as investors assessed China growth and inflation targets amid U.S. tariffs and escalating global trade tensions weighing down sentiment. Australia’s S&P/ASX 200 fell 0.70% to close at 8,141.1. Australia’s economy expanded 1.3% year on year in the fourth quarter, beating expectations of 1.2% from economists polled by Reuters. Japan’s Nikkei 225 added 0.23% to close at 37,418.24 while the Topix climbed 0.30% to end the trading day at 2,718.21. South Korea’s Kospi rose 1.16% to close at 2,558.13 while the small-cap Kosdaq advanced 1.23% to 746.95. Hong Kong’s Hang Seng Index added 2.8%, while mainland China’s CSI 300 rose 0.45% to close at 3,902.57. Investors are also focused on China’s “Two Sessions,” an annual parliamentary gathering, with the meeting of its top legislature, the National People’s Congress, kickstarting Wednesday. China on Wednesday set its GDP growth target for 2025 at around 5%. The country has also lowered its inflation expectations to “around 2%.”
– The dollar fell 0.6% against the yen to 148.87.
• COMMODITIES : OIL prices declined for a third session on Wednesday, as investors worried about OPEC+ plans to proceed with output increases in April, and U.S. President Donald Trump’s tariffs on Canada, China and Mexico escalated trade tensions. Brent futures fell $1.80, or 2.53%, to $69.24 a barrel. U.S. West Texas Intermediate (WTI) crude declined $2.05, or 3%, to $66.21 a barrel. Oil prices declined for a third session on Wednesday, as investors worried about OPEC+ plans to proceed with output increases in April, and U.S. President Donald Trump’s tariffs on Canada, China and Mexico escalated trade tensions. Prices pared some losses after hitting multi-year lows earlier in the session – Brent sank to $68.33, its lowest since December 2021, and U.S. crude futures touched $65.22, its lowest since May 2023. They recovered slightly after the U.S. Commerce Department chief, Howard Lutnick, said Trump would make the final decision on whether to grant any relief to certain industries on Bloomberg TV. While Lutnick said the 25% tariff levied on Canada and Mexico would remain, the relief under consideration would eliminate the 10% tariff on Canadian energy imports, such as crude oil and gasoline, which comply with the rules of origin under the U.S.-Mexico-Canada Agreement, a source familiar with the discussions said. GOLD prices rose on Wednesday, supported by a weaker dollar, as investors awaited the release of the U.S. payrolls data later this week for additional insights into the Federal Reserve’s monetary policy. U.S. gold futures rose 0.2% to $2,927.50. Spot gold rose around 0.1% to $2,919.5381 an ounce.
• JCI jumped 2.37% to 6531 but still could not maintain above its current sideways channel resistance of 6531.8. 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 118.66 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
• INET: INET and APJII to Build 58 Internet Exchange Nodes in Java Island
• JPFA: Japfa to Buyback IDR 470M Shares
• EDGE: Indointernet Discloses Expansion Plan in 2025
Domestic & Global News
Not Only Sritex, 2 Other Textile Factories Threatened to Close This Year
ECB Projected to Cut Interest Rates, Trade War Shadow European Economic Prospects
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