JAKARTA (TheInsiderStories) – Good Morning! The coming week will see a clutch of GDP updates to shed further light on the extent of the global economic collapse at the height of the COVID-19 in the second quarter. But, we will also see the release of more timely industrial production and retail sales data for key economies which will help assess recovery paths.
In addition to the economic data, the earnings season continues with more than 600 firms reporting. After news of the United States (US) economy contracting at a record 32.9 percent annual rate in the second quarter, eyes turn to industrial production and retail sales updates for July to gauge the recovery path heading into the third quarter.
June had already shown rebounds in sales and production, but doubts as to the durability of these rebounds have been raised amid redoubled efforts to stem increased COVID-19 infection rates. PMI data, for example, showed demand faltering during July amid the re-imposition of lockdown measures.
Similarly, industrial production and retail sales data, as well as investment numbers, will be eyed in China to steer estimates of third quarter economic performance. China saw GDP rise by 3.2 percent on a year in the second quarter after falling 6.8 percent in the first quarter – the first such fall for decades – reflecting China’s earlier lockdown and subsequent reopening of its economy.
The rest of Asia locked down later, which will likely be reflected in dismal second quarter GDP numbers for Japan, signaling a deepening recession, as well as Hong Kong SAR, Taiwan and Singapore.
In Europe, Britain second quarter GDP is expected to show a double-digit decline but the monthly estimate for June, including manufacturing, services and construction updates, should cement signs of recovery taking hold after the recent improvements evident in PMI data. Job market data will also be important in assessing wider UK recovery prospects.
Similarly, industrial production numbers for the eurozone will be eagerly awaited amid growing hopes of a strong initial industrial rebound for the region. In Asia, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) stated in the aftermath of the terrible tragedy in Lebanon, it is time for national unity – to overcome this disaster.
Its also a time for the international community of Lebanon to step up to help the country in this moment of urgent need. Currently, the Fund is exploring all possible ways to support the people of Lebanon.
In Indonesia, the central bank to announces retail sales survey report for August 11, residential property price survey report for the next day, and Indonesia’ foreign debt position on August 14. On Tuesday, Bank Indonesia also have agenda to absorbs the state bond through a burden scheme.
In a last private placement, the central bank purchased Rp82.1 trillion (US$5.66 billion). Today, finance minister Sri Mulyani Indrawati have schedule to give a media briefing on the acceleration of the National Economic Recovery Program and the 13th salary for Indonesian product expenditures.
Positive cases of the COVID-19 in the world have now exceeded 20 million cases and the United States as the country with the highest Covid-19 cases in the world has recorded more than 5 million cases. Total cases died reached 733,139 and recovered 12.88 million cases.
In Indonesia, the positive confirmed cases increased by 1,893 people or a cumulative 125,396 people, recovery increased by 1,646 people to 80,952 people. At the same time, cases of death were recorded increased by 65 people to 5,723 people.
Last weekend, Indonesian Rupiah weakened 0.27 percent to 14,625 per US Dollar and the Jakarta Composite Index (JCI) corrected 0.66 percent to 5,143.89 compared to the previous day. For today, the analysts sees the sentiment that will affect both instruments will be the release of US payroll and unemployment rate data.
In addition, the market will also look forward to the continuation of the cash transfer policy in Indonesia to boost people’ purchasing power. In terms of fundamentals, the Rupiah and the US dollar are both weakening and this will create a tug of war sentiment and limit the movement of both of them, they adds.
Meanwhile, the high position of foreign reserves in July will provide positive sentiment for market players.
Based on these developments, the Rupiah is estimated to moved between 14,450 – 14,700 versus the American Dollar and the JCI between 5,106–5,210. Stocks to be watch are PT Kimia Farma Tbk (IDX: KAEF), PT Indofarma Tbk (IDX: INAF), PT Astra Agro Lestari Tbk (IDX: AALI), and PT Surya Citra Media Tbk (IDX: SCMA).
Then, PT Telkom Indonesia Tbk (IDX: TLKM) , PT Aneka Tambang Tbk (IDX: ANTM), PT Barito Pacific Tbk (IDX: BRPT), PT Astra International Tbk (IDX: ASII), PT Bank Mandiri Tbk (IDX: BMRI), PT Semen Indonesia Tbk (IDX: SMGR), PT and PT Jasa Marga Tbk (IDX: JSMR).
-IHS Markit contributed to this briefing
May you have a profitable Week!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia