JAKARTA (TheInsiderStories) – Good Morning! Gauging the shape of the recovery will dominate the Federal Reserves meeting, from which markets will meanwhile be looking for more forward guidance. In this week, insights into the depth of COVID-19 related economic downturns also will be provided by second quarter GDP estimates for the United States (US), Eurozone, Hong Kong and Taiwan.
GDP data revealing economic recessions on scales not seen in post-war years are set to dominate the headlines. In the US, its expecting an annualized GDP decline of around 35 percent for the second quarter (near double-digits in quarterly terms).
In Europe, second quarter GDP releases for the Eurozone will include national updates for Germany, France, Italy and Spain, all of which are also set to show eye-watering quarterly declines of roughly double-digit magnitude as COVID-19 lockdowns hit economic activity.
Eurozone inflation numbers are also released while in the UK the main updates are for mortgage lending and consumer credit. In Asia Pacific, Hong Kong SAR and Taiwan GDP for the second quarter are issued alongside a new estimate of first quarter growth in Japan.
Monthly data for industrial production and trade are also updated for nations, including South Korea, Thailand, Vietnam as well as Japan, which will help gauge recovery momentum as we head into the third quarter. The government-sponsored China PMI is also released and will give important clues as to the recovery path at the start of the third quarter.
Beside, focus of the market for next week will be on US and China tensions. However, the market players expect a further stimulus package that is not much different from US Government. The Senate are rumored to consider extending unemployment benefits to US$400 per month until December 2020.
Today, President Joko Widodo will give directions related to the National Economic Recovery Program (ERP). While Chairman of the COVID-19 Handling and ERP Handling Task Unit, Airlangga Hartarto together with several ministers and PT Sarana Multi Infrastruktur will provide the ERP assistance to the Governor of West Java and DKI Jakarta.
Sentiment will also come from Bank Indonesia (BI), which projects the Indonesian economy will record negative growth in the second quarter of 2020 and its likely the decline will continue in the third quarter of this year.
They said, domestic market players must be careful with the positive sentiment of the COVID-19 vaccine because it still needs time to ensure the success of the drug. Vaccine trials also still have the potential to fail in the third phase of testing.
Last week, Indonesian Rupiah corrected 0.21 percent to the level of Rp14,610 per US Dollar and the Composite Stock Price Index fell 1.21 percent to 5,082.99 compared to the previous day. Today the local currency is estimated move in the range of 14,580 – 14,660 per American Dollar and the share index of 5.074 to 5,162.
Shares to be considered are PT Telkom Indonesia Tbk (IDX: TLKM), PT HM Sampoerna Tbk (IDX: HMSP), PT Gudang Garam Tbk (IDX: GGRM), PT Timah Tbk (IDX: TINS), PT Medco Energy International Tbk ( IDX: MEDC), PT Bank Tabungan Negara Tbk (IDX: BBTN), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Bank CIMB Niaga Tbk (IDX: BNGA), and PT Bukit Asam Tbk (IDX: PTBA).
-IHS Markit contributed to this briefing
May you have a profitable Week!
Written by Linda Silaen and TIS Intelligence Team. Please Read Our News to Get More information about Indonesia