Dovish expectations on the Fed, yet the data is not supportive enough. Although the probability is more than 90%, the December FFR increase is only +50Bps, to 4.50%, and the peak is 4.93% in May 2023. Investors are worried that the Fed will keep the FFR at a high level for a long time. The latest data shows that US  productivity in 3Q22 increased, and labor costs remained high amid the Fed’s effort to reduce inflation to the level of 2% YoY. In more detail, Nonfarm Productivity 3Q22 rose to 0.8% (vs. 2Q22 -4.1%; 1Q22 – 5.9%) or ended a two-quarter decline in a row. Meanwhile, US Unit Labor Costs in 3Q22 remained high, at 2.4% (vs. 2Q22 6.7%; 1Q22 8.5%).

Corporate Bonds
TOWR: Distribute Dividends of IDR6/Share. PT Sarana Menara Nusantara Tbk (TOWR) will distribute an interim dividend for the 2022 fiscal year of IDR16 per share. The dividend distribution is following the Company’s Board of Commissioners’ approvals on December 5, 2022. Additionally, the cum and ex-dividends are appointed on December 14 and 15, 2022, respectively. (Emiten News)

Domestic Issue
Indonesia’s Foreign Exchange Reserves Rise to USD134 Billion. Bank Indonesia recorded Indonesia’s Foreign Exchange Reserves (Cadev) at USD134 billion at the end of November 2022. An increase compared to the end of October 2022, which was at USD130.2 billion. This increase was influenced by tax and services revenue, as well as oil and gas foreign exchange receipts. Additionally, the cadev counted is equivalent to 5.9 months of financing on imports or 5.8 months on imports and the payment of the government’s external debts. (CNN Indonesia)

Recommendation
Oil prices come near the lowest level this year, as US fuel supplies are above forecast. Brent’s oil prices closed at USD77.2/barrel, approaching the Lowest Level of USD73.6/ Barrel YtD. Meanwhile, WTI closed at USD72.6/Barrel, or near the lowest level of USD70.6/Barrel YtD. This depreciation of oil prices contrasts with the hopes of China’s Zero Covid Policy to ease, as China is the world’s largest importer of crude oil. Other than normalization, the decline in global oil prices happens along with the weakening projection in global economic growth.

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