US stock indexes plunged above 1%, as the 2-year Treasury yield soared to its highest level since 2007, entering the upper 5% level as Federal Reserve Jerome Powell’s hawkish remarks ramped up bets on a return to aggressive rate hikes at the central bank’s March meeting; along with strong growth in February economic data. About 70% of traders now expect the Fed to deliver a 50 bps rate hike at its March 21-22 Meeting, a significant upward from 31% on Monday before Powell’s statement, as reported by CME Group Fedwatch. Powell also said that the Fed would not consider changing its 2% inflation target, and the job market does not suggest an economic downturn is close. Meanwhile, from Asia, China’s economic data release did not receive a positive reception from the market as their YoY (Feb.) Export & Import fell both from estimates and January, although managed to gain the largest surplus for 5 years at USD 116.88 billion (much higher than forecast & previous).
Earlier that day, JCI posted another 40 points/-0.591% decline to 6766.76, along with a Foreign Net Sell of IDR 377.57 billion, shrinking the total foreign buying from the beginning of the year (YTD) to IDR 2.62 trillion (compared to IDR 6.77 trillion at the end of February). The foreign exchange reserves data (Feb.) recorded an increase to USD 140.3 billion from USD 139. 4 billion (Jan.); however, this did not stop the Rupiah from weakening to IDR15400/USD (source: RTI Business). Considering that JCI has reached 50% Fibonacci retracement, NHKSI RESEARCH estimates there is still potential for further consolidation to FR61.8/6710. Indonesian capital market investors/traders are advised to Wait & See first while waiting for the JCI to reach a solid Support area.
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