Inflation below 8% ahead of the year-end holiday. The high base inflation in 2021 and the disinflation of several goods and services in the Oct. period suppressed the US Headline Oct. YoY dropped to 7.7% (Vs. Sept. 8.2%). The slowing down of inflation is pushing the probability of an increase in the FFR Des. for only +50Bps (Vs. +75Bps), up from 52% to 85%, according to CME Fed Watch. Fed Pivot expectations on Des., also supported by depressed labor data, with US Initial Jobless Claims for the week ending Nov. 5, up by 3% WoW.
Corporate Bonds
PTPP: Profit Accumulated at IDR141.02 Billion. PT PP (Persero) Tbk (PTPP) achieved a net profit of IDR141.02 billion or grew 8.9% YoY throughout 9M22. The company recorded operating revenue at IDR13.46 trillion, an increase of 20% YoY. Furthermore, cost of revenue was recorded at IDR11.64 trillion, an increase of 18% YoY. Meanwhile, gross profit soared by 27% YoY to IDR1.81 trillion. (Emiten News)
Domestic Issue
The Government Stops Providing VAT Incentives Borne by The Government. The government decided to stop providing Value Added Tax (VAT) incentives borne by the government for landed houses or flats and tax incentives in the form of sales tax on luxury goods. The government’s decision was taken by looking at the condition of the recovered automotive and property sectors.
Recommendation
BI is back to Hawkish, with BI 7DRR Nov. up by +50Bps, according to a Bloomberg survey. The increase of food commodity prices in the Nov. period made BI to be projected rising the BI 7DRR by +50Bps in Nov., to 5.25% (Vs. Oct. 4.75%).
Download full report HERE.
