G20 Ministers and Central Bank Governors meeting in Argentina - Photo by IMF

JAKARTA (TheInsiderStories) – Good Morning! Today, Statistic Indonesia will release export-import data during August. In July, the country experienced trade deficit narrowed sharply to US$63.5 million compared to last year $2 billion.

Based on the bureau data, exports fell 5.12 percent year-on-year (YoY) to $15.45 billion. While imports dropped at a faster 15.21 percent to $15.51 billion.

Then on Sept. 18 – 19, Bank Indonesia’ board of governor have a meeting to take a decision on their monetary policy in September. Last month, the central bank give a surprise with the second cut of 7 days reverse repo rate (BI-7DRR) by 25 bps to 5.5 percent. Deposit facility  and lending facility rates also dropped by 25 bps to 4.75 percent and 6.25 percent, respectively.

The week ahead is dominated by central bank policy meetings around the world, with the United States (US) Federal Open Meeting Committee (FOMC) being at the front and centre. Given increasing signs of global growth weakness, anything less than a quarter-point interest rate cut from the US Federal Reserves will surprise markets when the governors meets.

No change in policy is expected at the Bank of England, although increasing signs of the economy sliding into decline and heightened risks of a no-deal Brexit could see the MPC adopt a more dovish stance.

British’ prime minister Boris Johnson will tell the outgoing European commission president, Jean-Claude Juncker, that he will defy a new act of parliament and refuse to discuss or accept any offer to extend the nation’ membership even if a Brexit deal cannot be agreed. However, if those efforts fail he will be equally clear that he will not discuss or accept any extension and will simply take the UK out of the European Union with no agreement.

Last week, US’ President Donald Trump reports that Hamza bin Ladin, al Qaeda leader and son of Osama bin Laden, “was killed in a United States counterterrorism operation in the Afghanistan and Pakistan region.” He claimed is part of the country’ effort to fight the terrorism. 

In Asia, concerns that the yen may spike if Japan fails to loosen monetary policy at a time of Fed and European Central Bank easing will place the Bank of Japan’ policy meeting in focus. Taiwan also decide on monetary policy.

The Japanese government has agreed to abolish wine import tariffs from the US as part of a bilateral trade agreement expected to be signed by the end of this month at the sideline United Nations General Assembly meeting. Its reported, Japan will eliminate US wine tariffs within five to seven years after trade agreements take effect.

Japan itself has a wine import tax of 15 percent per liter depending on which is cheaper. Elimination of import tariffs can cut costs by around 13 percent for wine distributors. Its also expected to gradually reduce US beef import tariffs to 9 percent by 2033 from the current 38.5 percent.

In the middle East, US government said it was ready to utilize oil reserves if needed after the attack on Saudi Aramco in Saudi Arabia that reduced more than half of its crude oil production. Houthis from Yemen claim responsibility for attacks that crippled around 5 million barrels or 5 percent of global production.

According to the US department of energy’ data, US oil reserves have reached nearly 645 million barrels of oil, consists of 395 million barrels of heavy sour crude oil and 250 million barrels of light sweet oil.

After blackout for weeks, the government open the internet access in Jayapura city, Papua gradually. Previously, 27 regencies have reopened internet data services in Papua and West Papua after the government conveyed that the distribution of hoaxes, expressions of hatred, provocation and provocation related to the issue of Papua continued to show a downward trend since August 31.

The suspected on Papua riots, Veronica Koman chosen not to respond to what the police have alleged through the mass media on her. She rated, the police have abused their authority and have overestimated their efforts to criminalize her both in their methods and in exaggerating the facts.

On the haze case, President Joko Widodo has ordered the minister of environment and forestry Siti Nurbaya, national disaster agency’ chief Doni Monardo, chief of national army Hadi Tjahjanto, national police chief Tito Karnavian, and BMKG’ chief Dwikorita Karnawati to handling forest and land fires in the Riau Province region. At present, Tjahjanto and Monardo are in Pekanbaru to directly lead the control of forest and land fires, he adds.

Last weekend, Indonesian Rupiah continues its strengthening and closed up 0.19 percent to 13,967 a US dollar compared to previous day. Throughout the week the local currency strengthened 0.95 percent to the third strongest among other Asian currencies, under the Korean Won and the Taiwan Dollar.

But, the Jakarta Composite Index (JCI) dropped 0.11 percent to 6,334 on Friday, did not join the rally with other exchanges in the Asian region. Global stock markets have risen weekly for the third time thanks to easing fears of a US – China trade war and investors have begun to watch for new stimulus to be provided by the central banks.

Analysts said the easing of tension in the US and China trade tension opened the door for investors to re-accumulate risky investment assets. While, the corrected world oil price has also become a positive catalyst for the Rupiah. In addition, the projected trade balance surplus has also helped the Rupiah to move stronger.

Then, the ECB that poured stimulus and cut its benchmark interest rate by 10 basis points to -0.5 percent added another exchange rate strength against the US dollar. This week, the observer rated, the Rupiah will continue to strengthen at the level of 13,900 – 14,250 per US dollar.

While the JCI is expecting move in the range 6,296 – 6,448. While, the stocks  to be watch are PT Unilever Indonesia Tbk (IDX: UNVR), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Tower Bersama Infrastructure Tbk (IDX: TOWR), PT Chandra Asri Petrochemical Tbk (IDX: TPIA), PT Indofood CBP Sukses Makmur Tbk (IDX: ICBP), and PT Elang Mahkota Teknologi (IDX: EMTK).

May you have a profitable week!

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