United States Federal Open Market Committee kept the Fed Fund Rates in the range zero to 0.25 percent after two-days meeting - Photo by G20

JAKARTA (TheInsiderStories) – Good Morning! United States Federal Open Market Committee kept the Fed Fund Rates in the range zero to 0.25 percent after two-days meeting. Now, the market awaits European Central Bank’ monetary policy.

Its predicting, the Bank is not expected to make any moves on interest rates or adjustments to its EUR750 billion (US$815.22 billion) Pandemic Emergency Purchase Program until it gets better clarity on how the easing of lockdown measures is progressing.

On the same day, the secretary of commerce reported US economy shrank 4.8 percent in the first quarter of 2020, the first contraction since 2014. The contraction was experienced because efforts by the government to stem the spread of the COVID-19 have forced many companies in the US to close and consumers not to leave their homes.

From Asia, China’ national bureau of statistics, the factory activity expanded for a second straight month in April, as more businesses resumed work after the lockdown. In April, the Purchasing Managers’ Index dropped to 50.8 from 52 in the previous month.

In Japan, the parliament has agenda to approve a supplementary budget for stimulus package worth of JPY25.7 trillion ($240.84 billion) to cash-strapped firms to cushion the economic blow from the epidemic. The supplementary budget will fund part of a $1.1 trillion stimulus package of Prime Minister Shinzo Abe unveiled earlier this month.

In addition, the country’ March factory output fell at the fastest pace in five months and retail sales also dropped as businesses struggled with the COVID-19 pandemic. The official data showed, the factory output slipped 3.7 percent from the previous month.

In the some month, manufacturers surveyed by the government expect output to rise 1.4 percent and drop 1.4 percent in May. Retail sales also slumped 4.6 percent in March from a year earlier.

In Indonesia, minister of finance, Sri Mulyani Indrawati has agenda to examines the revision of 2020 State Budget with the parliament. While, President Joko Widodo will inaugurate the new Chief Justice of the Supreme Court, inaugurate the national development planning conference in 2020 and chair a limited meeting to mitigate the impact of COVID-19 on the employment sector.

Yesterday, Indonesian Rupiah closed up 0.98 percent to 15,295 versus the American Dollar compared to previous day. And, the Jakarta Composite Index edged up by 0.8 percent to 4,567.

Today, the analysts assess, the local currency is likely to strengthen and move in the range of 15,190 – 15,390 against the Greenback while the stock index in the range of 4,300 – 4,500.

One of the sentiments will affected the financial market is the lower development of COVID-19 spread in Jakarta, indicating the possibility of large-scale social distancing in early June will be loosened again. Its expecting, this will be followed by other provinces and the economy returns to running.

The termination of the social distancing became a fresh air for the market and caused the flow of foreign capital to flood the money market and bonds and will make Rupiah strengthened. The FOMC meeting decision to hold interest rates and promised to keep it until the US economy recovered also will give “vitamin” to the market.

Stocks to be considers for today are PT Telkom Indonesia Tbk (IDX: TLKM), PT Bank Mandiri Tbk (IDX: BMRI), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Bank Central Asia Tbk (IDX: BBCA), PT Unilever Indonesia Tbk (IDX: UNVR), PT Kalbe Farma Tbk (IDX: KBLF), PT Jasa Marga Tbk (IDX: JSMR), PT Gudang Garam Tbk (IDX: GGRM), PT Semen Indonesia Tbk (IDX: SMGR), and PT Indofood Sukses Makmur Tbk (IDX: INDF).

US$1: GBP0.92, JPY106.71

May you have a profitable Day!

Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia