JAKARTA (TheInsiderStories) – Good Morning! The Federal Reserves sees the biggest economic decline since World War II history in United States (US) in the second quarter of 2020. The target range for the federal funds rate was expected to remain at zero level at least in the next couple of years.
The officials said, a second wave of COVID-19 outbreak was no less plausible than their baseline forecast scenario and if it occurred, economic disruption will be more severe and protracted. Few of them noted that current low rates of interest might limit the effectiveness of further asset purchases beyond those needed for market function
While House’ speaker, Nancy Pelosi rated “Beijing’s so-called ‘national security’ law signals the death of the ‘one country, two systems’ principle. She urged President Donald Trump to hold Chinese officials accountable for their abuses including in Hong Kong by deploying sanctions under the 2016 Magnitsky Act and by taking steps under the Hong Kong Human Rights and Democracy Act, proudly passed by Congress.
According to her, the government must consider all tools available, including visa limitations and economic penalties. Yesterday, Hong Kong police fired water and tear gas cannons and arrested more than 300 people when protesters go to the streets were seen as violating new security laws imposed by China.
In Asia, Australia to revamp defense budget with A$270 billion (US$186.21 billion) spending amid rising tension in South China Sea. While, Singapore’ upcoming general election picks up steam after deputy prime minister Heng Swee Keat will battle the opposition Workers’ Party.
Yesterday, Indonesian Rupiah ended at 14,283 per US Dollar or corrected 0.13 percent and the Jakarta Composite Index (JCI) closed up 0.2 percent at 4,914 compared to prior day. The local currency was the worst among other Asian currencies.
The analyst rated, the Rupiah remains weak despite the current sentiment in the market that tends to support risky assets. Focus of the market was on the comments of Fed’ chair, Jerome Powell and US’ treasury secretary, Steven Mnuchin in his testimony on Tuesday.
The two US officials said they would do more to limit the weakening of the US economy due to the pandemic. and market expects that there will be plenty of stimulus in the future, including a reduction in the Fed Fund Rate.
In addition, IHS Markit reported the China Manufacturing PMI index for the June period was rose to 50.9 from previous month at 50.6. It became an economic signal from the second largest economy still growing despite being hit by the coronavirus.
Its also projected that flow of foreign funds would enter the country soon after the signing of the national security law for Hong Kong by Chinese President Xi Jinping. But, the growing number of COVID-19 cases is believed to further hamper global economic recovery and reduce investor interest in collecting risky assets, including Rupiah and JCI.
Listening to these information, they expect the Rupiah to move in the range of 14,250 – 14,300 against the Greenback and JCI between 4,900 – 5,000. Shares that can be considered today are PT Merdeka Copper Gold Tbk (IDX: MDKA), PT Medco Energi Internasional Tbk (IDX: MEDC), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), and PT Indofood CBP Sukses Makmur Tbk (IDX: ICBP).
Then, PT Indocement Tunggal Perkasa Tbk (IDX: INTP), PT Timah Tbk (IDX: TINS), PT Adaro Energy Tbk (IDX: ADRO), PT AKR Corporindo Tbk (IDX: AKRA), PT Aneka Tambang Tbk (IDX: ANTM), PT Bank Central Asia Tbk (IDX: BBCA), PT Medco Energy Tbk (IDX: MEDC), and PT Telkom Indonesia Tbk (IDX: TLKM)
May you have a profitable Day!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia