The Dow Jones and others confirmed to close last week’s trading in negative territory, with the DJIA posting the biggest decline since September, aminus of 3% last week causing the Dow to experience a decline of four consecutive weeks. The S&P 500 and Nasdaq Composite were down as well, with 2.7% and 3.3%, respectively. A number of important economic data and comments from Federal Reserve officials further confirmed the US Central Bank’s mission to keep interest rates high in order to control the inflation rate. Starting from the FOMC Meeting Minutes on Wednesday, almost all Federal Reserve officials agreed to set the future rate hikes to 25 bps and bring FFR to 4.75% at the next FOMC in March. The resilient US economy was reflected in the expansionary level of the US S&P Global Composite PMI, Initial Jobless Claims that fell below expectations, as well as the US 4Q22 GDP Report that grew solidly at 2.7%. Financial market experts have begun to expect the Fed Funds Rate to peak at 5.35% in July and stay around that level for the rest of the year; prompting speculation of a third-rate hike in June. All these hawkish views led the benchmark 10-year US Treasury yield to hit a 3.5-month high, almost reaching a 4% yield. The Dollar Index of 105.21 settled at a 10-week high as strong US economic data is expected to keep the Fed hawkish. On the domestic note, the 4Q22 current account surplus of USD 4.3 billion (1.3% of GDP) failed to aid the JCI’s performance in the past week, which also corrected slightly by 0.5%, despite IDR 226.4 billion in foreign funds. It seems that the Rupiah exchange rate position at IDR 15220/USD (the lowest level of USD/IDR in 1.5 months) is a black cloud that overshadows domestic market sentiment.

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