JAKARTA (TheInsiderStories) – Good Morning! A key event of the week ahead will be the latest Federal Open Market Committee (FOMC) meeting with updated United States (US) economic projections, while Europe sees important GDP and industrial production releases to give guidance on the depths of second quarter economic downturns in the United Kingdom and Eurozone respectively.
The US FOMC meeting comes on the heels of the European Central Bank unleashing an additional EUR600 billion (US$681.81 billion) boost to its lending program. With the COVID-19 pandemic having already taken a huge toll on the US jobs market and set to cause a record collapse in GDP in the second quarter, markets will be looking closely for any change in the Federal Reserves stance alongside its updated economic projections.
Its estimating which will set out the expected depth of recession and speed of recovery. Inflation data for the US are also released, together with consumer sentiment numbers for June.
In Asia, markets will be looking for clues as to the extent to which the Chinese economy might be reviving and also eagerly await trade and industrial production numbers across Asia Pacific. While, in Europe, we’ll also be eagerly awaiting developments from the the group as to the coordination of stimulus to fight the COVID-19 fueled downturn across the region.
From Japan, the country reported the economy shrank less than initially estimated to 2.2 percent in the first quarter. A series of recent April data including exports, factory output and jobs figures suggested Japan is facing its worst postwar slump in the current quarter
The revised data confirmed the third largest economy had slipped into recession for the first time in 4.5 years, after a 7.2 percent contraction in fourth quarter, pressured by last year’ sales tax hike and the US -China trade war.
On the commodity issues, Oil cartel and their allies agreed agreed to extend the cut in crude oil production until the end of July. The group also demanded countries such as Nigeria and Iraq that produce oil exceed their quota to be able to offset additional cuts in July to September.
In April, OPEC + agreed to cut oil production by 9.7 million barrels per day until this month to hoist oil prices that had fallen dramatically as a result of the epidemic. The cut will continue to 7.7 million barrels per day from July to December.
In Indonesia, the task force for COVID-19 Handling mentions that some regions in Indonesia are still implementing Large-Scale Social Distancing. The provinces are DKI Jakarta, West Sumatra, Gorontalo, and West Java whose PSBB will end on June 12. Specifically, in the areas of Bogor, Depok and Bekasi, the restriction will be valid until June 28.
On Monday, Bank Indonesia will announce its foreign exchange (forex) reserves in May. Last April, the reserves position stood at $127.9 billion, rises compared to March at $121.0 billion. Then on Friday, the central bank will announce the results of a consumer survey last month.
On Friday, Indonesian Rupiah closed up to and 1.49 percent to 13,850 against the Greenback and the Jakarta Composite Index (JCI) closed 0.63 percent higher at 4947 compared to prior day. Today, the local currencies is estimates move in the range 13,750 – 13,850 and the stock index between 4,900 to 5,000.
Stocks to be watch for today are PT Wijaya Karya Tbk (IDX: WIKA), PT PP Perkebunan London Sumatra Tbk IDX: (LSIP), PT Aneka Tambang Tbk (IDX: ANTM), PT Bank Central Asia Tbk (IDX: BBCA), PT Indofood Sukses Makmur Tbk, PT Kalbe Farma Tbk (IDX: KLBF), PT Astra Agro Lestari Tbk (IDX: AALI), PT Barito Pacific Timber Tbk (IDX: BRPT), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT PP Tbk (IDX: PTPP), and PT Astra International Tbk (IDX: ASII).
-IHS Markit contributed to these 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