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Weekly Briefing: Various Policies and Economic Data Out This Week

The coming week sees policy meetings at the Bank Indonesia, Bank of Japan, and the European Central Bank accompanied by industrial output numbers for the world’ largest economies - Photo: Special

JAKARTA (TheInsiderStories) – Good Morning! The coming week sees policy meetings at the Bank Indonesia, Bank of Japan, and the European Central Bank (ECB) accompanied by industrial output numbers for the world’ largest economies. In addition, retail sales data for the United States (US) and China.

Inflation data for the US, Eurozone and Britain will also be eyed as markets try to assess whether inflation or deflation looks set to dominate the post-COVID. In the US, June updates to industrial production and retail sales will give clues as to the durability of the upturn after rebounds seen in the May data.

While surveys have signaled further vigor in terms of economic growth momentum in June, concerns have been fueled that the upturn could already be losing steam amid renewed COVID-19 lockdowns. British’ monthly GDP for May, including a split of manufacturing, services and construction data, will be accompanied by inflation numbers and a detailed labour market report.

In the Eurozone, industrial production, inflation and trade numbers take the limelight ahead of Thursday’ ECB Governing Council meeting. In Asia, China’ second quarter GDP is the pick of the data releases, though the higher-frequency industrial production and retail sales data for June will provide important detail on whether the rebound since February’s lockdown has legs.

The Bank of Japan’ latest monetary policy meeting meanwhile comes on the heels of signs that Japan’s economic recovery is lagging behind the global average. Industrial production data will add insight in this regard.

Last week, Managing Director of the International Monetary Fund Kristalina Georgieva and President of the World Bank Group David Malpass announced the the 2020 IMF – World Bank Annual Meetings to take place in Oct. 12 – 18 by virtual conference,

Today, President Joko Widodo is scheduled to lead a limited meeting related to the acceleration of handling the impact of the COVID-19 pandemic and to distributes  working capital to the small and medium entreprises. Then, the senior minister for maritime and investment, Luhut Binsar Panjaitan hold a meeting on the use of Fly Ash and Bottom Ash for the electricity sector.

Then, Bank Indonesia (BI) will release Prompt Manufacturing Index II 2020. On Wednesday the board of governors’ start the two-days meeting and announces the banking survey for the second quarter of 2020.

On the same day, the statistics agency will announces the development of export imports during July 2020. Next Thursday, the central bank also to releases the results of the board of governors’ meeting and Friday convey the conditions of Indonesia’ foreign debt.

Analysts said that the focus of the market this week will be on the results of the BI meeting which is likely to again cut the benchmark interest rate by 25 basis points in line with domestic economic data that has not shown any recovery.

These data include, among others, declining consumer survey data, weak inflation, current account deficits that are not in line with BI’ target to automotive sales data which are also still low. According to them, with a variety of economic data this is a rational reason for BI to cut interest rates.

Last week, the Jakarta Composite Index (JCI) corrected 0.43 percent to 5,031.25 and the Rupiah was parked at the level of 14,435 per US Dollar or dropped 0.27 percent compared to the previous day. Today the local currency is estimated to move between 14,300 – 14,550 verus Greenback and stock indexes between 5,000 and 5,157.

Shares that can be considered today are PT Ace Hardware Indonesia Tbk (IDX: ACES), PT Indosat Tbk (IDX: ISAT), PT Mitra Keluarga Kary Advisor Tbk (IDX: MIKA), and PT Soechi Lines Tbk (IDX: SOCI), PT Bank Central Asia Tbk (IDX: BBCA), PT Telkom Indonesia Tbk (IDX: TLKM), PT Vale Indonesia Tbk (IDX: INCO), PT Ciputra Development Tbk (IDX: CTRA), and PT Sri Rejeki Isman Tbk ( IDX: SRTX).

-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