US economic data dominate market sentiment for the week. In addition, the US Unemployment Rate fell to a low of 3.5%; US PPI and CPI Sept. at 8.5% YoY and 8.2% YoY respectively; guarantee FFR Nov. the 4% level remains on track. Inflation that persists at a high level has a chance to make the PCE Core Deflator US Sept. surpassed the 5% YoY level, another Fed indicator in determining the size of the FFR hike. Meanwhile, the Indonesian Consumer Confidence Index Sept. which is still at an optimistic level, or at the level of 117.2 points, has not been able to withstand market pressures last week.
Corporate Bonds
Indika Buyback Bonds Almost IDR 450 Billion. PT Indika Energy Tbk (INDY) has bought back the 2024 debt securities worth USD 29.02 million or equivalent to IDR 448.9 billion. The repurchased debt securities represent 5.05% of the initial principal value of the debt securities in 2024 which reached USD 362.39 million or around IDR 5.6 trillion. (Investor Daily)
Domestic Issue
Services Balance Deficit Widens in 2Q22. The record of services balance in 2Q22 showed a deficit of USD 4.97 billion, or it can be said that this deficit is widened compared to the deficit in 1Q22 which was USD 3.70 billion. Compared to the deficit during the same period in the previous year, which was 3.70 billion, the deficit in 2Q22 widened. These numbers mainly come from the deficit in freight transportation services, in line with the import increase of goods that prompt freight services. (Kontan)
Recommendation
The release of domestic economic data, including Trade Balance, Exports and Imports, and BI 7DRR. Assuming BI 7DRR Oct. up +50Bps to 4.75%; and there is still RDG BI Nov. and Dec. In the future, the BI 7DRR by the end of 2022 can exceed the 5% level. From a global perspective, investors will keep an eye on the Strong Dollar sentiment, ahead of the fourth +75Bps FFR hike in early November.
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