Weekly Market Review (17 September 2018) - What happened & What's next?
- On global side, ECB delivered more hawkish tone last week and announced that would end QE in Dec’18, but as expected, keep its policy rate unchanged. Moreover, Turkey surprised markets by being hawkish and raising its policy rate 625bps. Additionally, weaker than expected August US CPI also helped to tame DXY last week. On domestic side, JCI gained +1.36%WoW to IDR5,931 last week, despite foreign outflow continued this week by –USD48m. Infra sector was the best performer (+3.5% WoW), buoyed by easing competition in Telco sector. Meanwhile, financial sector became the most laggard sector by gaining only +0.3%WoW. Newsflows to be watched within this week include Indonesia’s Trade Balance; US Current Account, Initial Jobless Claim, Markit Manufacturing PMI.
- IDR slightly strengthened by +0.1% WoW to IDR14,807, relatively inline regional market. On the other hand, DXY slipped to 94.9 (-0.5%WoW).
- Ahead August trade balance data announcement, bond market yield decreased by 8-14 bps across the curved. 10 years series decreased the most by 14 bps.
- Foreign investor continue to decrease position on Indo GB by approximately IDR4.8trn, especially on short tenor series.
- 10 year US Treasury yield increased from 2.94% to 2.99% driven by upbeat US economy data. July US retail sales data was revised up, to 0.7% from previously 0.5%
- US Initial Jobless Claims slipped 1,000 to a seasonally adjusted 204,000 for the week ended Sep 8, lower than market expectation of 210,000.
- U.S. CPI increased 0.2% in Aug’18, below market expectation. In the 12 months through August, increased +2.7%, slowing from July's 2.9% rise.
- China's consumer price index (CPI) rose +2.3%YoY in Aug’18, compared with 2.1% for July’18.
- China's retail sales of consumer goods grew +9%YoY in August’18, slightly higher than +8.8%YoY in July and stronger than economists’ expectations.
- China's industrial output expanded +6.1%YoY in Aug’18, slightly higher than +6%YoY in July’18. In 8M18, industrial output rose +6.5%YoY, 0.1% points slower than the Jan.-July period.
- China’s Aggregate financing stood at CNY1.52trn (USD221bn) in Aug’18, higher than consensus of CNY1.30trn and CNY1.04trn in July’18. Corporate bond financing grew larger than expected, while the shadow banking sector continued to shrink.
- Monthly BI FX reserves data declined by USD400m in Aug’18 vs recent average decline of USD1-2bn/month, the smallest month on month drop YTD.
Foreign net purchases of Indonesia equities