The Nasdaq posted its first weekly fall for this year last week, down 2.41%; while the S&P 500 ended the week lower 1.11% and the Dow Jones slightly fell by 0.17%, in a week dominated by hawkish commentary from US Central Bank and earnings reports. Inflation rates on the producer level in Europe continue to heat up, German inflation grew on an annual and monthly basis at 8.7% YoY and 1% MoM. The market now again expects the FFR to peak at 5.1% in July (as per the Fed’s previous prediction), and drop to around 4.83% in December. Powell reiterated significant declines in inflation should be seen by 2023. However, cutting rates will not happen anytime soon, given the Fed’s 2% inflation target. The market expects two more 25 bps rate hikes by the middle of this year. The 2-year and 10-year bonds yields curve widened further at 85 points, the deepest inversion since the early 1980s. Thus, reigniting economic concerns even though market participants began to accept that the Federal Reserve must be hawkish again. JCI failed to maintain its position at 6900, even though Foreign Net Buy was accumulated at IDR2.52 trillion in the past week. As a result, the total foreign net buy over the past month increased to IDR 5.11 trillion. This buying interest began to re-emerge after Indonesia’s relatively outstanding macroeconomic data: 4Q22 GDP at 5.01% (Cumulative GDP in 2022: 5.31%), Foreign Exchange Reserves rose to USD 139.4 billion; while Consumer Confidence Index (Jan.) grew to 123.
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