JAKARTA (TheInsiderStories) – Good Morning! This week, United States (US) – China trade developments still dominating markets. In addition, investors will see the release of important indicators of how both economies have been faring.
UN economists say the US – China trade war is a situation that is detrimental to both countries and the world. The trade war is estimated to cost US$35 billion for China in the first half of this year, while US consumers and companies bear the brunt of the more expensive tariffs.
For the US, the Purchasing Manufacturing Index (PMI) survey data hints at some steadying of manufacturing from the downturn seen earlier this year. But both inflation and retail sales could remain under pressure amid signs that weak demand is limiting pricing power. Fresh inflation numbers will also be eagerly awaited.
In Europe, third quarter economic growth trends will be revealed for Germany and the UK, both of which are skirting with recession. While, for China, the overall picture from the PMI surveys remains one of an economy struggling as trade war tensions exacerbate the underlying trend of slower economic growth.
Elsewhere in Asia, the week brings GDP updates from Japan, Malaysia and Hong Kong, while New Zealand and the Philippines will decide on monetary policy. In Indonesia, investors await various policies will produce by the government.
Today, President Joko Widodo will lead limited meeting on labor and current account deficit (CAD). As reported, the head of state wants his ministers solve various problem in this two areas by drive investment and export.
In the third quarter of this year, the country’ CAD lowered to US$7.7 billion from $8.2 billion gaps a year earlier, or equivalent to 2.7 percent of the country’s gross domestic product. The central bank noted the goods account surplus widened to $1.26 billion from $0.50 billion gaps a year ago, with exports falling 8.53 percent and imports decreasing 12 percent.
Going forward, Bank Indonesia (BI) sees balance of payments in 2019 and 2020 will be in the range of 2.5 to 3.0 percent of GDP with large foreign capital inflows. The Bank will continue to strengthen policy synergies with the government and related authorities to improve external resilience, including efforts to encourage increased foreign investment.
On Monday, BI will release the residential property price survey. And, end of this week, the development of export import in October and the latest of foreign debt position in nine months of 2019.
End of last week, Indonesian Rupiah strengthened 0.39 percent to 14,014 over the Greenback and the Jakarta Composite Index (JCI) slightly up 0.20 percent to 6,177.99 compared to prior day.
Some analyst viewed the combination of global and domestic policies will color the market this week. Last week, Bank of England decided to keep interest rates steady at 0.75 percent. But several officials (including Governor Mark Carney), said they would consider a decline if global barriers and the Brexit problem did not diminish.
Potential increases in commodity prices could also increase the JCI and Rupiah. Its predicting China’ coal demand began to increase followed the winter season.
It said, these makes investors tend to wait and see while waiting for economic data to be released this week. Among them are loan growth data, car sales, to the trade balance.
The observers predicts, local currency can still strengthen and move in the range of 13,975 – 14,040 per US dollar. While the JCI is expected to have a chance for consolidation to strengthen with support at 6,139 and resistance at 6,240.
Stock to be watch for today are PT Astra Intenational Tbk (IDX: ASII), PT HM Sampoerna Tbk (IDX: HMSP), PT Gudan Garam Tbk (IDX: GGRM), PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bukit Asam Tbk (IDX: PTBA), PT Bank Central Asia Tbk (IDX: BBCA), PT Chandra Asri Petrochemical Tbk (IDX: TPIA), PT Telkom Indonesia Tbk (IDX: TLKM), PT Barito Pacific Timber Tbk (IDX: BRPT), PT United Tractors Tbk (IDX: UNTR), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), and PT Bank Mandiri Tbk (IDX: BMRI).
May you have a profitable week!
Written by Linda Silaen and TIS Intelligence Team, Please Read Our Insight to Get More information about Indonesia