Inflation Above Target and Rupiah at 15,000. US PCE Core Deflator in May was up +0.3% MoM (+4.7% YoY); still high compared to last month’s +0.3% MoM (+4.9% YoY), supporting the Fed’s aggressive Hawkish stance in July, which is projected to increase FFR by 75 bps to 2.25%-2.50%. Other data show that consumers restrain consumption, with Personal Spending only growing 0.2% in May (Vs. Apr. +0.6%), while Personal Income was flat +0.5% in the same period. The US economic data was followed by Indonesia’s Headline CPI YoY that reached 4.35% or above the ceiling of BI’s annual inflation target of 2%-4.2%. Investors pay close attention to issuers’ margin pressures, following price increases and supply chain shock. Last week, JCI closed lower by 3.5% with rupiah closing in on the psychological level of IDR 15,000/USD.
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