JAKARTA (TheInsiderStories) – Good Morning! This week we will see the GDP estimate updates for the America (US), Germany, and France, for a more accurate view into the extent of the economic collapse during the second quarter (2Q). There are remain concerns to the durability of momentum gained amid efforts to contain COVID-19 infection cases.
Markets will focus their minds on business surveys and a virtual meeting of global central bankers to gauge recovery paths going forward as well as glean what monetary policymakers’ latest view is regarding the global economy. The Jackson Hole symposium, to be held virtually, will be watched for any signs of future policy changes at the Federal Reserves in particular, and broader guidance on global monetary policy.
US’ flash Purchasing Managers Index (PMI) indicated a solid rise in private sector growth during August, with services business activity returning to expansion. Alongside robust retail sales and housing data for July, eyes now turn to durable goods orders, personal income and spending updates for more clues as to the strength of the recovery heading into the third quarter.
The Republican National Convention meanwhile will also gather interest in the run up to November’ election. In Europe, after flash PMI data signaled a loss of momentum in Eurozone growth in August, analysts will look to a slew of sentiment surveys across the bloc’ three largest economies for further guidance on the progress of any recovery.
While, a speech by the Bank of England governor will provide clues as to the central bank’s latest thinking on negative interest rates as a viable policy tool. In Asia, data releases on trade, industrial production and retail sales are among the highlights, but analysts will also be monitoring sentiment surveys in South Korea, Japan and Indonesia to appraise the prospect of further economic recovery in the region.
Flash PMI data for Japan and Australia indicated weakness in economic activity midway through the third quarter. And, Industrial profits for July in China will also draw scrutiny for signs of improvement in the industrial sector. A decision on monetary policy will meanwhile come from the Bank of Korea.
On Friday, Indonesian Rupiah has recorded a gain of 0.15 percent to the level of 14,773 per US Dollar. But, the Jakarta Composite Index (JCI) closed down 0.42 percent to 5,272.81 compared to previous day.
This week, said the analysts, both instrument has possibility to strengthening supported by improved data on Indonesia’ balance of payments (BoP) and trade balance. Based on data from Bank Indonesia (BI), Indonesia’ BoP in the 2Q of 2020 recorded a surplus of US$9.2 billion after experiencing a deficit of $ 8.5 billion in the previous month.
The improvement in the trade balance is supported by a decrease in the current account deficit (CAD) and a large surplus in the capital and financial account. CAD in the second quarter of 2020 was $2.9 billion or equivalent to 1.2 percent of gross domestic product (GDP), lower than the deficit in the 1Q of 2020, which was $3.7 billion or 1.4 percent of GDP.
The July’ trade balance recorded a surplus of $3.26 billion and during January – July posted a surplus of $8.75 billion. They rated, the improved data will make investors optimistic about the economic recovery amid the development of the COVID-19 vaccine.
But, they continued, the domestic market also overshadowed by the mixed global stock exchange. The investors still watching the progress of the US – China negotiations.
They predicted, the Rupiah between 14,600 – 14,800 a US Dollar and JCI will continue weakened to level 5,190 – 5,313 in this week. Stocks to be watch are PT Bank Rakyat Indonesia Tbk (IDX: BBRI), PT Gudang Garam Tbk (IDX: GGRM), PT Adaro Indonesia Tbk (IDX: ADRO), PT Bukit Asam Tbk (IDX: PTBA), PT Wijaya Karya Tbk (IDX: WIKA), PT AKR Corporindo Tbk (IDX: AKRA), PT HM Sampoerna Tbk (IDX: MSP), and PT Ultrajaya Milk Industry Tbk (IDX: ULTJ).
-IHS Markit contributed to this 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