Investors responded negatively to speculations of a September FFR increase of +100Bps at the FOMC Meeting next week. CME FedWatch starts projecting a +100Bps September FFR increase probability of 18%, from the previous +75Bps 82% increase, responding negatively to the August YoY US Core Inflation rate to 6.3% (Vs. Surv. 6.1%; Jul. 5.9%). Core Inflation is the Fed’s benchmark in setting the FFR amount.

Corporate Bonds
WIKA: Cuts Target for New Contracts. PT Wijaya Karya Tbk (WIKA) lowered the target for new contracts throughout 2022 to IDR39 trillion from the previous IDR42.57 trillion. Meanwhile, to date, new contracts have reached IDR18 trillion and the company have only received 2 IKN projects worth IDR1.1 trillion originating from toll roads and flats for IKN infrastructure workers using modular. (Emiten News)

Domestic Issue
Temporary 2023 State Budget, IDR 598.2 Trillion Deficit. The 2023 State Revenue and Expenditure Budget (APBN) has begun to be revealed. This is after the DPR’s Budget Agency (Banggar) agreed on the temporary posture of the 2023 APBN. Minister of Finance Sri Mulyani Indrawati mentioned the agreement on the 2023 APBN posture. The 2023 APBN deficit was agreed at 2.84% of gross domestic product (GDP) or IDR 598.2 trillion. (Kontan)

Domestic economic data. Today, investors are looking forward to the release of domestic economic data, Trade Balance Aug. projected a surplus of +USD4Bn (Vs. Jul. +USD4.2Bn), based on a Bloomberg survey. This projection, along with Exports and Imports YoY in the same period, is projected to grow 19.9% (Vs. Jul. 32.0%) and 31.6% (Vs. 39.9%). As for external data, the PPI MoM US Final Demand in August recorded a deflation of -0.1% (Vs. Surv. -0.1%; Jul. -0.4%) or continued deflation for the second month in a row. NHKSI Research sees that the combination of CPI and PPI makes PCE Core Deflator Aug. YoY is projected to remain high, or one of the Fed’s indicators to set the FFR rate.

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