JAKARTA (TheInsiderStories) - Good Morning! The coming week we will sees policy meetings at no fewer than ten central banks, including the Federal Reserves, Bank of Japan, and Bank Indonesia, plus a wealth of data releases which will help steer views on current economic growth, employment and inflation trajectories.
Policymakers will be seeking to balance a brightening economic outlook following the development of COVID-19 vaccines, against signs of further long-lasting damage from the pandemic. The problems facing policymakers are encapsulated in recent Purchasing Manager’ Index (PMI) data, flash numbers for which are updated during the week.
In the United States (US), the Federal Open Meeting Committee meets for the first time since the presidential elections and the encouraging news on vaccine roll outs, though the outlook remains clouded by uncertainty over the pandemic stimulus. Flash PMIs for the country will also be closely watched as the first indicators of national economic trends in December amid rising the infection rates.
From Britain, the PMI data will give an insight into whether growth has been regained after November’ lockdowns, accompanied by official labour market and retail sales numbers. On the Brexit issues, Prime Minister Boris Johnson and presiden European Union Ursula von der Leyen agreed to keep talking but “no-deal Brexit” is now likely after both vow to “go extra mile” on the deal.
In Europe, added insight into how severe a fourth quarter downturn might be, given the additional measures implemented to fight the pandemic in recent weeks will come from Flash Eurozone PMIs. While, Germany Chancellor, Angela Merkel, announced another lockdown in the country starting Wednesday until at least Jan. 10 to stop the virus outbreak.
In Asia, China’ economy is the main focus of the week, with key official data such as industrial production and retail sales updated. The releases follow news from the Caixin PMI that business activity grew in China during November at the fastest rate for over ten years. Japan, in contrast, is seeing a far more muted economic recovery according to the PMI, for which December flash data will be updated on Wednesday.
Today, Bank of Japan survey showed, Japanese business sentiment improved for the second straight quarter in October - December to minus 10 in December from minus 27 in September. Big non-manufacturers’ sentiment also recovered to minus 5 from minus 12 in September.
Big firms plan to cut their capital expenditure by 1.2 percent in the current business year to March 2021, a sign slumping profits and uncertainties over the outlook were discouraging firms to ramp up spending. It was a downgrade from their plan to raise capital spending by 1.4 percent made in the September survey and compared with market forecasts for a 0.2 percent cut in expenditure.
On the politic side, Indonesia, Bhutan, and Oman could be next in line to establish diplomatic relations with Israel in the coming weeks, a diplomatic source said Sunday. The United Arab Emirates, Bahrain, Sudan, and Morocco have agreed to normalization with Israel. US’ Vice President, Mike Pence, plans to visit Israel in January. He may announce that another country will establish relations with Israel.
In Indonesia, statistic bureau has agenda to releases export and import data for December. And, Bank Indonesia has schedule to announced the latest monetary policy on Thursday.
At the end of last week, Indonesian Rupiah strengthened 0.18 percent to 14,080 per US Dollar and the Jakarta Composite index (JCI) rose 0.08 percent to 5,938.3 compared to the previous day. Analysts assess that the strengthening of both is supported by the arrival of the vaccine, increasing optimism for economic recovery in Indonesia.
Although external data supports a negative direction, market players are optimistic that the Indonesian economy will revive again, so that foreign capital flows will again be heavy.
Regarding external sentiment, one of the factors influencing the movement of the financial market was the ongoing discussion on the stimulus package in the US. Senate majority leader, Mitch McConnell, has expressed support for treasury secretary, Steven Mnuchin’ US$916 billion proposal and stressed the need to make every effort to help the economy.
On the other hand, the European Central Bank (ECB) also launched another stimulus package worth EUR500 billion ($605.19 billion). The ECB will continue its ongoing bond-buying stimulus up to EUR1.85 trillion and will extend its support program to at least March 2022 from its current earliest end date in mid-2021.
With the various information, the Rupiah is estimating between 14,050 - 14,100 and the JCI in the range 5,900 - 6,000. Stocks to be watch for this week are mining, energy, property, consumer, manufacturing, and banking. For today PT AKR Corporindo Tbk (IDX: AKRA), PT Bukit Asam Tbk (IDX: PTBA), PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Vale Indonesia Tbk (IDX: INCO), PT Aneka Tambang Tbk (IDX: ANTM), and PT Ciputra Development Tbk (IDX: CTRA).
-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
