JAKARTA (TheInsiderStories) — Good morning! The ongoing tariff trade war between the United States (US) and China may be in a ceasefire now but the tension continues. Canadian Huawei Technologies Co. Ltd. CFO, Meng Wanzhou, was arrested last Dec. 1st.
She was apprehended in Vancouver, and is now facing extradition to the US. China is warning Canada that there will be serious consequences if Meng is not released.
China considers it to be foul play, as Meng was apprehended by US request. Meng allegedly connected Huawei to a company that’s trying to sell equipment to Iran, while Iran is under US sanction.
If extradited to the America, Meng will face accusations over an alleged conspiracy of illegal activities with financial institutions. She is facing a 30 year sentence for each case involved.
The ongoing tension between the US and China made the Rupiah continue lower, weakened by 0.22 percent to 14,539, on Friday (12/07). Foreign net sell in the stock market was recorded at Rp538.63 billion (US$37.14 million), accumulated to Rp46.35 trillion from the beginning of 2018. Even so, the Jakarta Composite Index has still enjoyed a 0.17 percent gain, to 6,126.35.
Then, Bank Indonesia Senior Deputy Governor Mirza Adityaswara realises that the volatility of the Rupiah exchange rate is caused by global sentiment and the US and China trade war that has not yet subsided. The trade war is feared to slow down world economic growth.
Moreover, Chinese central bank responded by depreciating the Yuan and creating a bigger loss in emerging markets. Besides Indonesia, he highlighted that the Indian Rupee has had a worse slump compared to other developing countries.
Adityaswara then stressed that Indonesia must focus on solving the current account deficit by increasing exports, tourism, and managing unnecessary imports.
Furthermore, Finance Ministry’s gathered Rp4.9 trillion from State Saving Sharia Bond or so called ST-002, exceeded the Rp1 trillion target. Government will use the sharia bond investment for infrastructure funding.
While, Organization of the Petroleum Exporting Countries (OPEC) and its alliances including Russia has agreed to cut oil production amid US President Donald Trump to critics. The cut is by 1.2 million barrels per day (bpd), even bigger than the market predicted. OPEC will cut 800 thousand bpd while non-OPEC will contribute 400 thousand bpd cut.
The oil production cut will start in January 2019, and will be evaluated again in April. OPEC’s decision made oil prices jump to US$63 per barrel on Friday.
Ahead this week, Indonesia will announce November’s consumer expectation survey on Thursday. The United Kingdom, amid Brexit uncertainty, will also announce several economic data figures, such as GDP and trade balance today, and the unemployment rate the following day.
Meanwhile, South Korea will announce November’s unemployment rate, on Tuesday. Singapore’s unemployment rate and retail sales will be disclosed on Wednesday. China also has its unemployment rate being published this week, on Thursday. India will release their country’s trade balance data on Friday.
May you have a profitable week!