As markets seek direction after United States (US) presidential elections, the focus will shift back to the economic impact of the COVID-19 pandemic and whether governments can avoid second-dip downturns - Photo: Privacy

JAKARTA (TheInsiderStories) – Good Morning! As markets seek direction after United States (US) presidential elections, the focus will shift back to the economic impact of the COVID-19 pandemic and whether governments can avoid second-dip downturns.

Investors will be watching appearances by several Federal Reserve officials, including Jerome Powell later in the week. Other releases include the inflation and job market numbers, which should help steer policymaking. Inflation has shown some signs of picking up, but more worrying has been indications that the labour market recovery could be fading.

In Europe, United Kingdom (UK) and the European Union (EU) have until Nov. 15 to reach an agreement on a Brexit deal. Similar deadlines have come and gone before but this one is important because the transition period ends on Dec. 31.

Both sides say a deal can be reached, but the EU’ chief negotiator has warned of “very serious divergences.” As talks head into extra time, markets will also get an update on the health of the economy from third quarter GDP figures on Thursday, along with data on industrial production.

PMI data indicated that the global economic recovery remained resilient up to October, major cracks were already appearing in countries where the authorities have instigated renewed lockdown measures. In particular, growth in the eurozone has stalled and the UK, also dealing with Brexit, saw growth weaken substantially.

Fortunately, robust growth continued to be seen in the US, China and other emerging markets, notably India and Brazil, but the infection rates will inevitably be a big steer on the markets as a guide to future economic growth projections.

In Europe, GDP and labour market statistics are updated for both the Eurozone and UK, as well as higher frequency industry production and trade data for both economies. The data are likely to show economies rebounding in the third quarter but the focus now shifts to the extent to whether renewed downturns can be avoided in the fourth quarter, and the extent to which the all-important labour markets have remained resilient in the face of the pandemic.

In Asia, GDP data for Malaysia, Philippines, Hong Kong and Japan are all reported, though China’ credit and foreign investment figures, as well as Japan’ machinery orders, will also gain attention as more timely guides to economic recovery trends. The latest monetary policy decision is meanwhile awaited from New Zealand.

In Indonesia, the government has issued a government regulation as a derivative of the Omnibus Law for Job Creation. The government’ move continues to be opposed by workers and students. They continue to threaten to take to the streets to reject the law and have submitted a judicial review to the Constitutional Court.

While, Bank Indonesia has schedule to announced the Consumer Survey Report for October on Monday. Then, on Wednesday will announce the Retail Sales Survey Report for September and on Thursday will release the Third Quarter 2020 Residential Property Price Survey Report.

In the financial markets, analysts believe that the Rupiah is predicted to strengthen this week in line with the weakening of the US dollar following Joe Biden’ victory in the US Presidential election. His political style, which is very opposite to Donald Trump’s, is considered to have provided fresh air to the market.

One of them is because Biden is likely to freeze the trade war between the US – China and the European Union. They rated, the local currency gained additional momentum to move up against the US Dollar, continuing its strengthening trend since last week.

Last weekend, Indonesian Rupiah strengthened 1.18 percent to 14,210 versus the American Dollar. This week the local currency is expected to hit the 13,000 level again against the Greenback.

On Friday, The Jakarta Composite Index (JCI) closed up 1.43 percent to 5,330 compared to prior day. The observers expected the stock index to move in the range 5,300 – 5,450 in this week.

Stocks that can be watched this week are in the banking, mining, consumer, retail, pharmaceutical and manufacturing sectors. Today, analysts recommend PT Bank Central Asia Tbk (IDX: BBCA), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Bank Mandiri Tbk (IDX: BMRI), and PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Kalbe Farma Tbk (IDX: KLBF), PT Bukit Asam Tbk (IDC: PTBA), PT HM Sampoerna Tbk (IDX: HMSP), PT Gudang Garam Tbk (IDX: GGRM), and PT Indika Energy Tbk (IDX: INDY).

-IHS Markit contributed to this briefing

May you have a profitable Week!

Written by Linda Silaen, Please Read Our News to Get More information about Indonesia