JAKARTA (TheInsiderStories) — Good morning! China’s economy moved lackadaisically, impacted by its trade war with the United States, even though the tension is now easing. Some economic data such as industrial production growth and retail sales data failed to meet expectations.
Chinese National Bureau of Statistics reported that November’s industrial production growth decelerated to 5.4 percent. While, retail sales showed its weakest position since May 2003, increasing by 8.1 percent. The growth is also slower than the 8.6 percent registered in October.
Even so, China’s fixed-asset investment flourished by 5.9 percent from January-November, higher than the 5.7 percent growth compared to the previous month.
On Tuesday (12/18), Chinese President Xi Jinping will give a major speech, marking the 40th anniversary of China’s opening up and reform. China’s historic reform and subsequent opening up of the country was initiated in 1978, then followed by a series of capitalist acts, which resulted in China becoming the world’s largest economy.
Go to the European market, Euro currency exchange declined, caused by sluggish economic data and triggered market fear ahead of British Exit. The United Kingdom’s withdrawal has been generating turmoil in the European Union region.
At the end of last week, the Indonesian Rupiah was almost motionless despite the sentiments, slightly weakening by 0.01 percent to 14,538 against US dollar. Foreign net sell in stocks market recorded low at Rp84.48 billion. Jakarta Composite Index decreased by 0.12 percent to 6,169.84.
Then, Oil Palm Plantation Funds has disbursed Rp5.51 trillion ($380.00 million) of Rp7 trillion biodiesel incentives until November. The disbursement almost reached 2018’s biodiesel 20 percent (B20) incentive funds for Rp5.58 trillion.
The incentives given is considered lower amid diesel price increase and biodiesel market index price decrease. So its average incentive fell to Rp2,074 per liter from Rp4,075 per liter last year.
The board allocated the same amount of funding next year. Meanwhile, the B20 distribution target will be increasing, almost doubling, from 3.3 million-3.4 million kilo litres to 6.2 million kilo liters.
Furthermore, Indonesia car sales in January-November grew 7.17 percent to 1.06 million. But November sales decreased by 5.03 percent from October. Toyota still holds the highest market share, with 30.6 percent. It fell by almost 5 percent compared to the same period last year.
Most of the Japanese commercial carmakers market shares are decreasing, while Chinese car manufacturers slice of the market is slightly increasing. Wuling market shares rose from 0.4 percent to 1.4 percent and DFSK grew from zero to 0.1 percent.
Ahead this week, central banks will dominate market attention, with the Federal Open Market Committee (FOMC), Bank of England being the key organizations to watch. England will announce its interest rate on Thursday (12/20) and US will decide earlier on Wednesday (12/19).
Recently, the US Fed interest rate is at 2.25 percent and has been gradually increasing for 8 times since December 2015. President Donald Trump previously attacked Fed’s policy stance as “crazy”, “loco”, “ridiculous”, and “way off base”.
He also pressed the FOMC not hike the interest rate, amid the ongoing trade war with China. The board will also announce the US economic projection at the meeting.
In the Asia region, Japan, Thailand, Indonesia, and Taiwan will also decide on their monetary policy. Bank Indonesia has increased the 7-day reverse repurchase rate (7-DRR rate) by 25 basis points (bps) to 6 percent in November.
Analysts have mixed predictions over the Bank of Indonesia (BI) 7-DRR rate decision, mid December. Some consider that the previous rate was enough to stabilise negative global sentiments while some others opined the increase amid Fed rate hike potency for next year.
Today, Statistic Indonesia to announce export and import data in October. Last September the country’s experienced trade surplus $230 million in September from previous month minus $1.02 billion.
May you have a profitable week!
Written by Linda Silaen and TIS Intelligence Team, Please visit our new website to get more insight on Indonesia’s economy: www.tisintel.com