Next Week Full of Chaos
Susie Setiawati, CNBC Indonesia
Market
Sunday, 13/08/2023 17:45 WIB
Photo: Indonesian President Joko Widodo, wearing traditional Bangka Belitung clothing, delivers his annual State of the Union Address ahead of the country’s Independence Day, at the parliament building in Jakarta, Indonesia, Tuesday (16/8/2022) (AP Photo/ Tatan Syuflana)
Jakarta, CNBC Indonesia – The domestic capital market (JCI) weakened 0.19% to the level of 6,879.98 at the close of trading on Friday (11/8/2023). However, within a week the JCI managed to gain 0.39%. The JCI strengthened this week because it was supported by the release of the company’s brilliant financial performance.
On the other hand, the rupiah has been battered this week. On a weekly basis, the rupiah has weakened 0.30%. Thus the Garuda currency has weakened for four consecutive weeks.
Next week, financial markets are expected to continue to fluctuate given the large number of important data and agendas that will be released in the next week.
One of the most important sentiments this week will come from the People’s Representative Council (DPR)/People’s Consultative Assembly (MPR) building.
Another sentiment is the July trade balance data. Sentiment from abroad will come from data on Japan’s economic growth, data on retail sales and China’s unemployment, as well as the minutes of the Federal Open Market Committee (FOMC) meeting last July.
Photo: Minister of Finance Sri Mulyani gives a press statement on the Financial Notes and Draft 2023 State Revenue and Expenditure Budget (RAPBN) at the Chakti Budhi Bhakti Hall (CBB), Head Office of the Directorate General of Taxes, Jakarta, Tuesday (16/8/2022). (CNBC Indonesia/ Muhammad Sabki)
Here are some important sentiments for next week:
1. Financial Note Speech and State of the Union Address
On Wednesday (16/8/2023), the DPR, MPR, and the Regional Representatives Council (DPD) will hold an annual Joint Session event.
On this occasion, President Joko Widodo (Jokowi) will deliver a State of the Union address in the morning and an introductory speech/government statement on the Draft Law (RUU) concerning the 2024 State Budget and Expenditure Revenues (APBN) and Financial Notes in the afternoon.
Through his State of the Union Address, President Jokowi will convey the focus of the future government starting from politics, law, security, to the economy.
In the afternoon, President Jokowi will deliver an introductory speech on the 2024 RAPBN. This speech is of great concern to both market players and entrepreneurs because it will be the direction for Indonesia’s future development. The President will reveal macroeconomic targets starting from growth, inflation, the rupiah exchange rate, lifting of crude oil and gas, as well as the price of Indonesian crude oil/ICP.
The President will also reveal the target of state revenue from both taxation and non-taxation, the focus of future government spending, and how the government will meet financing needs in 2024.
The 2024 Draft State Budget is very important because 2024 will be the final year of Jokowi’s administration.
Market players or the public will find out what the focus of next year’s development policy will be, especially related to fuel subsidies, infrastructure development, debt financing, civil servant salaries, continued construction of the National Capital, and other projects.
The public also wants to know what legacy Jokowi will leave in his final term of office.
2. Trade balance
The Central Statistics Agency (BPS) will announce July 2023 trade balance data on Tuesday (15/8/2023). The trade surplus is expected to shrink in July in line with the weakening economy in major trading partners, such as China and the United States (US).
For the record, the trade balance surplus in June 2023 was recorded at US$ 3.45 billion.
Indonesia’s export value for the June 2023 period reached US$20.61 billion, down 5.08% compared to exports in May 2023. Then when compared to the June 2022 period the export value fell by 21.18%.
Indonesia’s import value for the June 2023 period reached US$17.15 billion, down 19.40% compared to May 2023 or down 18.35% compared to June 2022.
3. Japan’s inflation, economic growth, and trade data
On Tuesday (15/8/2023), Japan will announce projected economic growth data for the second quarter of 2023.
Japan’s economy grew 2.7% (year on year/yoy) in the first quarter of 2023. The Japanese economy is projected to grow rapidly to reach above 3% in the second quarter of 2023 as reflected in the country’s high demand and inflation.
On Thursday (17/8/2023), Japan will also announce trade data for July.
Japan’s imports contracted by 12.9% (yoy) last June while exports continued to grow 1.5% (yoy).
If Japan’s imports contract again, Indonesia must be vigilant considering that Sakura Country is the second largest export destination country for Indonesia. Contracted imports indicate that Japan’s demand for goods from abroad, such as Indonesia, may decline.
Japan will also announce inflation data for July on Friday (18/8/2023).
Japan, which has been struggling with deflation, is currently facing high inflation rates. Negara Sakura recorded inflation of 3.3% (yoy) in June and is expected to increase to 3.4% (yoy) in July.
If Japanese inflation continues to increase, the Japanese central bank (BoJ) will likely take further steps to suppress inflation.
The BoJ still maintains its ultra-low interest rate at minus 0.1% to sustain Japan’s growth.
4. China’s retail sales and unemployment data
On Tuesday (15/8/2023), China will announce data on industrial production, retail sales and unemployment figures for July. China’s economy is in the spotlight after their economic data showed deterioration.
Their retail sales grew 3.1% (yoy) in June and are expected to rise above 4.5% in July.
If retail sales weaken or fall below market expectations, it will increase world concern about China’s economy after China announced deflation in July last week.
China is the main engine driving the economy in the Asian region so that the weakening of China’s economy is also a danger alarm for Indonesia.
5. FOMC and US jobless claims
The US central bank The Federal Reserve (The Fed) will announce the minutes of the July FOMC meeting on Wednesday US time or early Thursday Indonesian time (17/8/2023). The minutes are expected to provide further guidance to market players regarding the Fed’s interest rate policy going forward.
At the FOMC meeting last month, the Fed raised interest rates by 25 bps to 5.25-5.5%% and signaled there would be an increase in interest rates going forward.
It is hoped that the FOMC minutes will provide more clarity on how much the interest rate hike will be in the future and when it will be increased.
America will announce retail sales data on Tuesday (15/8/2023) for July. US retail growth was 1.5% (yoy) in June and is expected to weaken 1% in July.
If retail growth is faster than market projections then it could dampen market hopes to see the Fed soften soon.
On Thursday (17/8/2023), the US will also announce jobless claims for the week ending August 12. The number of US citizens filing unemployment claims in the previous week (August 5) was recorded to have increased by 248 thousand. Labor data will be one of the Fed’s main considerations in determining policy.
Apart from the important data above, there are also important agendas from other countries such as the announcement of UK inflation for July on Wednesday (16/8/2023) and European Union inflation for July on Thursday (17/8/2023).
Disclaimer: This article is a journalistic product in the form of views from CNBC Indonesia Research. This analysis does not aim to persuade readers to buy, hold, or sell related investment products or sectors. The decision is entirely up to the reader, so we are not responsible for any losses or profits that arise from that decision.
Watch the video below:
Stock Market vs. Bonds, Which is the Market Maker’s Choice in 2023?
(saw/saw)
2023-08-13 10:45:42
#Jokowis #Order #Waiting #Market #Fed #China #Deliver #Urgent #News