In today’s briefing:
- Indonesia’s Election – When the Music’s Over?
- 5 Things We Watch – Meeting Minutes, Cyclical Momentum, Natural Gas, Excess Retirements & China
- Labour Nugget: Could the next move be a hike?
- Indonesia Policy Rate 6.0% (consensus 6.0%) in Feb-24
- Strong US and Weak Japanese Data Shifts Interest Rate Expectations – Implications for Stock Markets?
Indonesia’s Election – When the Music’s Over?
- Prabowo looks to have scored a resounding victory in Indonesia’s Presidential election, according to quick count results, with around 58% of the vote, which is positive from a visibility perspective.
- Initial reaction suggests continuity from Jokowi’s legacy, with concerns centred around potentially nationalistic policies and increased government borrowing in the future, which may pressurise Indonesia’s budgetary position.
- We remain positive on the outlook for Indonesia, with increased government spending to fast-track Jokowi’s legacy projects. Prabowo also looks set on driving higher GDP growth next year.
5 Things We Watch – Meeting Minutes, Cyclical Momentum, Natural Gas, Excess Retirements & China
- The possibility of a comeback for both the manufacturing sector and inflationary pressures have reached the desks of macro enthusiasts, but markets have yet to fully acknowledge and factor in such possibilities, with initial bearish price action after both price releases being traded back within days, signaling that markets are still all about the direction of travel towards rate cuts.
- Let’s dive right into this week’s 5 themes, and how to trade them!
- This week we are watching out for the following 5 topics within global macro:
- Meeting Minutes
- Cyclical Momentum
- Natural Gas
- Excess Retirements
- China
Labour Nugget: Could the next move be a hike?
- “The labor market remains tight, but supply and demand conditions continue to come into better balance,” We have heard Powell using this phrase continuously since last autumn and it has been a key ingredient in the dovish pivot in Q4.
- But is the labour market truly coming into better balance, or is the post-pandemic equilibrium of higher wages and tighter labour market conditions of a more permanent character?
- “Excess retirements” have grown sharply through 2023 again on improving wealth effects due to the rebound in equities, housing and crypto.
Indonesia Policy Rate 6.0% (consensus 6.0%) in Feb-24
- Bank Indonesia’s decision to hold the BI-Rate at 6.00% balances persistent financial market uncertainties against strong domestic economic growth and the need for Rupiah stabilization.
- Anticipated pressures from the global financial environment and domestic economic activities will dictate the future direction of interest rate policies, with a continued emphasis on ensuring Rupiah stability and controlling inflation within the set targets.
- The central bank’s commitment to leveraging pro-market monetary tools and enhancing financial system digitalization underscores a forward-looking approach to monetary policy aimed at bolstering economic resilience and inclusion.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
Strong US and Weak Japanese Data Shifts Interest Rate Expectations – Implications for Stock Markets?
- Some recent US data has been stronger than expected especially on the inflation front.
- Japanese domestic economy confirmed to be in recession as we expected
- Both markets remain buoyant – the question is for how long?
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