Market Sentiment Next Week: IHSG and Rupiah Updates, US Fed Interest Rates, and Global Recession Predictions | CNBC Indonesia

Jakarta, CNBC Indonesia – The Composite Stock Price Index (IHSG) tended to be bright last week, where the JCI shot up almost 1%, 0.92% to be exact point-to-point (ptp).

Meanwhile, on Friday trading (9/6/2023), the JCI closed up 0.42% to 6,694.024. The JCI transaction value this week reached IDR 47.2 trillion.

Meanwhile, the rupiah was also observed to be excited this week, in which the Garuda currency was able to increase by 1%. point-to-point front of the United States (US) dollar. On Friday trading this weekend, the rupiah closed up 0.37% to Rp 14,835/US$.

The brightening of the JCI last week occurred after the imposition of limits auto reject (ARB) which was previously 7% to 15% starting Monday earlier this week, where this is a gradual step to return to normal limits auto reject symmetrically.

JCI also had volatile trading throughout this week. But in the end, JCI was able to close in the green zone. Only on Tuesday trading this week was it closed in the red zone.

This week, sentiment was colored by market predictions that the US central bank (Federal Reserve/The Fed) would not raise interest rates next week. This happened after the US economy showed signs of slowing down.

US investment bank Goldman Sachs projects that there is a 25% probability that the US will experience a recession in the next 12 months.

Europe, which has already experienced a recession, also affected the movement of the rupiah. Eurostat on Thursday (8/6/2023) revised the euro zone’s economic growth to -0.1% quarter-to-quarter (qtq) in the first quarter of 2023. In the previous quarter, gross domestic product (GDP) also grew negatively, so it is called experiencing a technical recession.

Recession does have a bad impact, but in the “war” against high inflation, this is exactly what people look forward to. When a recession occurs, economic activity decreases, mass layoffs (PHK) can occur, so that people’s purchasing power decreases. That could make inflation fall more quickly.

This is better than dealing with high inflation for a long time. Moreover, for example, if the economy is still strong, it can trigger a wage-price spiral or price increases leading to wage increases.

Thus, this recession can actually be welcomed by market players, the rupiah also received positive sentiment.