As the market braced for a recession, investors turned to defensive stocks, sending Wall Street up 0.3%. Investors responded to job postings that remains high, with US May JOLTS Job Openings of 11.3 Million (Surv. 11 Million), keeping the Fed on an aggressive Hawkish path. The Fed’s job is to cool demand for labor and the economy, in order to bring inflation down to its 2% target. This data as of May is the sixth month in a row with more than 11 million job vacancies, supporting a 75 bps increase in July FFR instead of 50 bps in the FOMC Rate Decision at the end of July. A potential recession is again attracting interests in USD safe haven, with DXY rising to 107.09 Vs. last week 105.14. Meanwhile, UST2Y Yield Inversion 3.00% Vs. UST10Y 2.92%, once again forming a Negative Yield Spread.
Investors are observing Consumer Non-Cyclicals and Banks, ahead of some Earning Results at the end of July. Yesterday, the JCI closed down 0.9% to 6,646, with foreign net sells of IDR 308 billion. Meanwhile, the Consumer Non-Cyclicals sector rose 0.8%, followed by Healthcare 0.5%. Meanwhile, the Finance sector only weakened 0.2%. Today, investors are looking forward to the release of forex reserves data for June which is likely to be under pressure again, along with the depreciation of the Rupiah, payment of USD denominated debt, and the absence of June Global Bond issuance based on DGPR data. For the record, forex reserves as of May was USD135.6 billion. NHKSI Research projects that the JCI will move downward in the range of 6,550-6,800.
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