Today’s Outlook:

• All three major averages are on track to finish the week with modest gains. The S&P 500 is on pace for a 0.7% advance, while the Nasdaq is tracking for a 0.8% gain during the period. The Dow is lagging, with a week-to-date increase of about 0.5%. Stocks have managed to rebound from the sell-off on Monday after President Donald Trump over the weekend announced 10% tariffs on China. He agreed to pause 25% levies on Canada and Mexico. Traders’ focus now moves toward January’s jobs report, which is slated for release on Friday at 8:30 a.m. ET. Economists surveyed by Dow Jones are expecting nonfarm payrolls growth of 169,000 for the month, which is lower than the 256,000 jobs added in December. The unemployment rate is also expected to hold steady at 4.1%.

• MARKET SENTIMENT: The US on Friday will be releasing data related to the employment conditions during January such as Average Hourly Earnings (Forecasted to be 0.3% MoM); Non-Farm Payrolls (Forecasted to drop 169k from 256k); and Unemployment rate (Forecasted to stay the same at 4.1%). Outside of US employment conditions, the Fed Monetary Report will be released.

• FIXED INCOME & CURRENCIES: The dollar index was up against a basket of peers at 107.69, but it still hovered near the lowest level since the start of last week, with investors beginning to entertain prospects that a global trade war could be averted. In the absence of tariff headlines, markets looked ahead to the release on Friday of key U.S. monthly payrolls figures, the next major test for the U.S. monetary policy outlook. The dollar index hit a two-year high of 110.17 on January 13, but has since retreated 2%. U.S. Treasury yields were up on Thursday as investors looked ahead to January’s nonfarm payrolls report. The 10-year Treasury yield gained nearly 2 basis points to 4.438%, and the 2-year Treasury yield rose more than 2 basis points to 4.212%. One basis point is equal to 0.01%, and yields and prices have an inverted relationship.

• EUROPEAN MARKETS: The regional benchmark Stoxx 600 ended the trading day higher by 1.26% as almost all sectors traded in positive territory. European markets closed at a record high Thursday amid a flurry of earnings releases and a quarter-point rate cut by the Bank of England. The U.K.’s FTSE 100 rose 1.3%, also hitting a record high. Earlier the British pound tumbled 1% against the U.S. dollar — suggesting traders expect a clear path of rate cuts ahead — despite the central bank stressing it would act “carefully” in its future decisions and raising its inflation forecast. The fact that all policymakers voted to reduce rates while two of nine voting members unexpectedly favored a bigger half-percent cut was seen as a dovish signal by the market, which has almost fully priced in three more 25-basis-point cuts this year.

• ASIAN MARKETS: Asia-Pacific markets opened lower Friday as investors awaited India’s interest rate decision, and assessed Japan’s household spending data. Australia’s S&P/ASX 200 slipped 0.12%. Japan’s Nikkei 225 fell 0.34% and the Topix traded 0.32% lower. The country’s household spending in December rose 2.7% year on year in real terms, sharply beat Reuters’ expectations of a 0.2% rise. South Korea’s Kospi shed 0.26%, while the small-cap Kosdaq fell 0.3%. Hong Kong’s Hang Seng index futures were at 20,907, slightly higher than the HSI’s last close of 20,891.62. The Reserve Bank of India is likely to trim the benchmark repo rate by 25 basis points to 6.25%, as it concludes its policy meeting later in the day.

– The yen strengthened as far as 151.81 per dollar — the strongest level since December 12 — in the Tokyo morning, after the BOJ’s Naoki Tamura said the central bank must raise rates to at least 1% or so in the latter half of fiscal 2025 with upward risks to prices rising. Japan’s currency was last changing hands at 151.85 per dollar, up 0.5% on the previous day, paring some of the early gains after Tamura clarified that he didn’t mean that the neutral rate should be 1%. The market is currently pricing in a quarter-percentage-point BOJ rate hike by September.

• COMMODITIES: OIL prices settled lower on Thursday after U.S. President Donald Trump repeated a pledge to raise U.S. oil production, unnerving traders a day after the country reported a much bigger-than-anticipated jump in crude stockpiles. Brent crude futures fell 32 cents, or 0.4%, to settle at $74.29 a barrel. U.S. West Texas Intermediate crude fell 42 cents, or 0.6%, to $70.61. Trump on Thursday repeated a pledge to boost U.S. oil production in order to lower commodity prices, saying the country will produce more oil than anyone has ever seen before. Oil prices have tumbled by about 10% since January 15, five days before Donald Trump took over as U.S. President, with the marketed buffeted by rapidly changing tariff measures from the U.S. against its major trading partners. GOLD slipped 0.4% to $2,853.83 per ounce after hitting an all-time high of $2,882.16 on Wednesday. U.S. gold futures dropped 0.5% to $2,877.9. Gold prices slid 1% on Thursday as the U.S. dollar firmed ahead of a key jobs report and investors took profits, after bullion recorded consecutive record peaks in the previous five sessions on the back of escalating trade tensions between the U.S. and China.

• JCI significantly corrected by 2.12% and broken through the support of 6952. Indonesia’s major index has the potential to reach the downtrend channel support at 6788-6772. With an overall bearish sentiment across local markets, there was a significant Net Foreign Sell of IDR 2.38 tn. Rupiah has weakened 0.32% to IDR 16,324. NHKSI is of the opinion the current trade war between the US and several countries will take the wind out of Indonesia’s sails–meaning local markets will have no meaningful catalyst for foreign institutions to maintain their capital in the country, and justifying to receive fresh capital flow from them will be exceedingly difficult to pursue unless there is a seismic political or economical shift.

Company News

• DEWA: Finalize Conversion Price of IDR 75 per Sheet
• SRAJ: Next Monday, SRAJ Permits Investors to Issue USD125 Million Notes
• ANTM: Antam Sets 2024 Gold Sales Record

Domestic & Global News
Government Prepares Special Economic Zones (SEZs) to Support Beauty Industry
Reasons for President Trump to Freeze USAID, Support Vietnam Electric Car to Wuhan Project

Download full report HERE.