Dear investors, pay attention to this sentiment let Cuan next week

Jakarta, CNBC Indonesia – The compact Indonesian financial market closed lower this week. The Composite Stock Price Index (JCI) fell 3.02% and the rupee fell 1.15% against the US dollar (US).

The weakening was triggered by concerns from market participants about the potential for a global recession as the US central bank (Federal Reserve / The Fed) is expected to be aggressive again to raise the benchmark interest rate at the next meeting. to reduce inflation.

Referring to FedWatch, as many as 97.2% of market participants expect the Fed to raise its benchmark interest rate by 75 basis points (bps) and bring the Fed interest rate to a range of 3.75% – 4%.

This happened after the release of US inflation data in September 2022, which showed that inflation was still in a high position and hadn’t slowed down quickly.

The US Bureau of Labor Statistics reports that the leading US CPI is 8.2% (Year after year/ aa) last September.

The inflation rate was in fact lower than the 8.3% (y / y) recorded in August but still above market expectations of 8.1% (y / y).

On a monthly basis (month by month/ mtm), inflation was recorded in September at 0.4%, an increase compared to August which stood at 0.1%. Core inflation hit 6.6% (y / y) in September, the highest level since 1982 or in 40 years.

The Fed’s aggression is expected to bring the superpower country’s economy into a recession zone and will certainly impact other countries around the world. America is the largest economy in the world.

The GDP of the United States represents 25% of the world economy. The United States also led the highest economic position since 1960, even before WWI and WWII. On this basis, the United States is known as an economic superpower.

Therefore, if the country with the largest economy in the world is depressed, it will surely disrupt the global economy.

The potential for a global recession also increases demand for the US dollar, which includes currencies refugethus weighing on the country’s financial markets.

Before starting trading next week, investors should look into different economic programs within the country and abroad.

Feeling first, Monday (17/10/2022), market participants will be presented with the release of the trade balance starting from September which will be released by the Central Statistical Agency (BPS). Market consensus collected CNBC Indonesia Of the 13 financial institutions, the trade balance surplus will be further eroded to $ 4.85 billion. The surplus is projected to be much smaller than in the August 2022 period which reached $ 5.76 billion.

The consensus also predicts that exports will grow by 27.47% (Year after year/ yy) while imports increased by 34.31%. If the trade balance returns to print a surplus, Indonesia has recorded a surplus for 29 consecutive months.

As a note, the value of exports in August 2022 reached US $ 27.91 billion or jumped 30.15% (year over year / year over year). Imports were recorded at US $ 22.15 billion or increased by 32.81% (year over year).

Bank Mandiri chief economist Andry Asmoro expects export value to weaken in September, in line with falling crude palm oil prices.

According to the data Refinement, the average price of crude palm oil (CPO) fell by 10.3% during all trading in September 2022. The CPO contributed 13% of Indonesia’s total exports, hence the drop in oil prices of palm tree could have a major impact on total exports.

Andry also added that the decline in China’s manufacturing PMI could have an impact on slowing import demand Bamboo tent country. China’s PMI slowed to 48.1 in September from 49.5 in August. This means that the Chinese PMI has not been in an expansion phase for the second consecutive time.

The slowdown in demand from China is highlighted. K.Chinese consumption during the long Golden Week vacation in early October 2022 was the lowest in seven years.

As reported Hellenic Shipping News.comthe average shipment of goods to the Pacific coast with the main destination of China fell 17% compared to the same period last year ahead of the Golden Week holiday.

Indeed, in previous years, the week leading up to Golden Week was a busy time for freight to catch up with demand and catch up before the factories closed during the holiday season. China is Indonesia’s largest trading partner. The slowdown in demand from China will have a major impact on Indonesian exports.

“The slowdown in exports can still be repressed by the high demand for CPOs from India ahead of the Dilwali celebrations,” said Andry. CNBC Indonesia.

Feeling according to, is from Bank Indonesia (BI) which is expected to announce its policy interest rate decision (BI 7-Day Reverse Repo Rate) on Thursday (20/10). Trading Economics analyst consensus predicts BI will raise the benchmark interest rate by 25 bps and bring the BI rate to 4.5% from 4.25% previously.

Previously, BI had surprised the public when it decided to raise the benchmark interest rate by 50 basis points at the Board of Governors (RDG) meeting on September 21-22, 2022. This decision clearly marked the end of the era of low interest rates.

BI Governor Perry Warjiyo at a press conference revealed a number of reasons why the central bank again raised its benchmark interest rate to 50bps in last month’s RDG. This is an early loading phase of BI.

“The decision to raise interest rates is an early, forward-looking and forward-looking step,” Perry said Thursday (9/22/2022).

Perry said an interest rate hike of 50 basis points is a way for the central bank to lower inflation expectations and ensure core inflation returns to the BI target range of 3 plus minus 1% in 2023.

“In addition to strengthening the rupee’s exchange rate stabilization policy so that it is in line with its fundamental value due to global financial market uncertainty amid growing demand for the domestic economy which remains strong,” he said. Perry said.

Meanwhile, sentiment from abroad is coming from the Country of the Bamboo Curtain, where on Tuesday (18/10) market participants will receive the release of economic growth for the third quarter of 2022.

Consent of analysts Business economics forecasts that Chinese GDP in the third quarter of 2022 will grow to 3.4% compared to the previous quarter to 0.4% on a quarterly basis (qtq). Meanwhile, China’s year-on-year GDP is also expected to grow to 4.5% from the same period last year to 4.2%.

China is Indonesia’s largest trading partner, so the release of the data is very important and must be observed.

Referring to data from the Ministry of Commerce, China occupies the first position as the main trading partner with Indonesia in the period January-August 2022. The value of non-oil and gas exports is 39.08 billion US dollars or equivalent. to Rp 602.8 trillion. (assuming an exchange rate of Rp. 15,425 / US $). Meanwhile, the value of non-oil and gas imports was US $ 44.59 billion or equivalent to Rp 692.5 trillion.

RESEARCH TEAM OF CNBC INDONESIA

[Gambas:Video CNBC]