Today’s Outlook:
• Dow Jones and others ended flat on Thursday (05/10/23) as investors are on edge about the release of Nonfarm Payroll (NFP) & Unemployment Rate data this Friday (06/10/23). Both data play a role in shaping the Federal Reserve’s decision on whether to raise rates at next month’s FOMC Meeting. Initial Jobless Claims data released on September 23rd again resulted below expectations, in which there were only 207 thousand jobless claims compared to market estimates at 210 thousand, but this figure was still an increase from the previous week at 205 thousand. As for NFP, the US economy is expected to have created about 170k jobs in September, with Wage Growth likely to have ticked up by 0.1% for the month, but remain steady in the 12 months through September. There have also been strikes from UAW members at the big three US automakers recently; yet these will not be reflected in the NFP data. Treasury yields retreated again on Thursday (05/10/23), though remain at 16-year high as investors wary of upside to resume as a stronger jobs report on Friday’s labor data could signal that the Fed has more work to do restrict growth. San Francisco Fed Bank President Mary Daly said at the Economic Club of New York that with the current restrictive US monetary policy and the recent rise in US Treasury yields, the Fed may not need to raise rates any more. In addition to macroeconomic data, market participants are also still alertly monitoring the issuers’ Q3 earnings reports as a market sentiment factor.
• US ECONOMIC DATA: The US reported an increase in Exports and a decrease in Imports during August, moving their Trade Balance to a deficit of USD 58.3 billion. This figure was lower than the market forecast (USD 62.3 billion deficit) and also from the previous month’s deficit (USD 64.7 billion). Nonfarm Payroll data which has been the focus of investors worldwide is expected to come in at 170k for September, down from 187k in August. Average Hourly Wage growth in September is predicted to remain unchanged. Another important economic data is the Unemployment Rate (Sept), which is predicted to continue to show the strength of the US labor market by showing 3.7%, down slightly from 3.8% in the previous month.
• ASIA MARKETS: South Korea announced CPI (Sept.) at 3.7% yoy, a slight increase from predictions and August reading of 3.4%. Meanwhile, foreign investment in Japanese bonds and stocks appeared to increase significantly as net buying was detected compared to massive selling in the previous period. On the one hand, Japanese household spending for August was detected to have increased significantly above expectations. Japan accumulated Foreign Exchange Reserves (Aug.) at USD1,237.2 billion, both slightly decreased by around USD14 million from the previous month. Later around 10.00 am GMT, Indonesia will release their Foreign Exchange Reserves data, which will be compared to our last position at USD137.1 billion.
• EUROPE MARKETS: On the other hand, Germany was able to score a Trade Balance surplus of EUR16.6 billion, better than the EUR15 billion estimate, although on both fronts August’s Exports & Imports appeared to drop more than expected, but at least the decline has been slower than the previous month. Talking about September’s Construction PMI: Germany, the Eurozone and the UK are still sinking deeper into contraction territory. This afternoon, German investors will monitor German Factory Orders (Aug.) data which is expected to bounce back significantly by 1.8% mom, from -11.7% in July.
• COMMODITIES: Global crude oil prices retreated another 2% on Thursday, extending the previous 6% decline, as the market was disappointed by the absence of any new announcements on production cuts at the recent OPEC+ meeting held on Wednesday. The price of WTI (New York) for November contract is now at USD82.31/barrel, dropping 2.3%, while Brent (London) for December contract fell 2% to USD84.07/barrel; both had hit a 5-week low before closing with a slight rebound. The soaring USD exchange rate since July and the US Treasury yield are also the culprits for the fall in USD denominated crude oil prices.
• JCI: as we predicted earlier, if the JCI fails to close above 6950, then the JCI is not yet free from the threat of a further decline and could even reach Support 6800-6750. NHKSI RESEARCH advises market participants to monitor Support 6840 at the end of this week; and still maintain a WAIT & SEE attitude while waiting for the release of important US labor data later tonight.

Company News
• ELSA : Record Growth in Contracts Reached IDR11.3 T
• TPIA : Company’s Business Entity Acquires Land Worth IDR1.15 Trillion
• TPMA : Optimistic for Business to Perform Well until End of Year

Domestic & Global News
• Electric Motor Conversion Lacks Interest, Here’s ESDM’s Strategy
• Germany Approves Bringing Coal-Fired Power Plants Back Online This Winter

Download full report HERE.