US inflation is flattening. The high base of inflation in 2021 and the disinflation of several goods and services suppressed the US Headline Inflation in Oct. down to 7.7% YoY. According to CME Fed Watch, this occurrence drives the probability of an increase in the Dec. FFR of just +50Bps, up from 52% to 85%. Fed Pivot expectations in Dec. also supported by the depressed labor data, as US Initial Jobless Claims rise by 3% a week. The Fed Pivot sentiment also boosted a number of commodities, such as oil and gold, along with pressure on the DXY.
Corporate Bonds
FREN: Revenue Up 8.5%. PT Smartfren Telecom Tbk (FREN) recorded operating revenues of IDR8.29 trillion throughout 9M22, an increase of 8.5% YoY. Operating expenses rose to IDR7.85 trillion while operating profit rose to IDR436.55 billion. Additionally, the current period’s net profit attributable to the parent entity’s owners was recorded at IDR1.64 trillion. (Emiten News)
Domestic Issue
Second Week of November 2022, Inflation of 0.11% Occurred. After recording a deflation of 0.11% MoM in October 2022, the Consumer Price Index (CPI) is expected to experience inflation again in November 2022. Based on the Bank Indonesia (BI) price monitoring survey in the second week of November 2022, inflation growth up to the second week of this month is estimated at 0.11% MoM. BI recorded the main commodity contributing to inflation in November 2022 up to the second week, purebred chicken eggs, which were at 0.02% MoM. (Kontan)
Recommendation
BI is projected to be hawkish again as they raise the BI 7DRR +50Bps for the second time later on Thursday (17/11) at the BI RDG. This raising becomes a negative catalyst for the Technology Sector, which has strengthened by more than 4% in a week. Besides the increase in prices of several food commodities, November inflation, amid the disbursement of Direct Cash Assistant (BLT) in fuel Phase 2, will increase the consumption of the Middle to Low community.
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