Today’s US dollar strength is attributed to benchmark 10-year US treasury yields hovering near their highest level in seven years. Meanwhile, the most recent comments of US President Donald Trump on trade negotiations with China cause some concern. Trump said he doubts the ongoing Saham.news with China in Washington will turn out to his satisfaction because “China has become very spoiled”. Trump also said “the European Union (EU) and other countries have become very spoiled simply because they always got one hundred percent of whatever they wanted from the USA.”
Such statements cause renewed concerns about the breakout of a global trade war. But on the contrary, the EU vowed that it is able to negotiate opening its markets wider to US imports – including car shipments – in a bid to avert a prospective trade war.
On the May 2018 policy meeting (concluded on Thursday) Indonesia’s central bank (Bank Indonesia) decided to raise its benchmark monthly interest by 25 basis points to 4.50 percent in an attempt to reduce heavy pressures on the rupiah.
Another issue – one which is giving rise to geopolitical concerns – is the news that North Korea canceled high-level talks with neighboring South Korea on Wednesday (16/05) because the latter is still involved in military exercises with the USA. Serious doubts have now emerged on if the historic summit with North Korean leader Kim Jong Un and US President Donald Trump goes-ahead as planned on 12 June 2018.
Contrary to Indonesian bonds as well as the rupiah, the Analisa Berita Pasar Modal ended slightly in green territory ( .06 percent) on Wednesday (16/05) after coping with deep red territory that was touched earlier inside the day. Indonesian stocks happen to be sliding significantly in the last couple of weeks and now have actually become quite attractive, especially for long-term investors. Up to now in 2018 foreign investors have been net sellers of around USD $2.9 billion of Indonesian stocks, implying ifhvlq Indonesian equities are definitely the worst performer in Asia so far this coming year.
Meanwhile, the central bank of Indonesia (Bank Indonesia) is scheduled to conclude its monthly monetary policy on Thursday (17/05). We expect Bank Indonesia to increase its benchmark interest rate (the 7-Day Reverse Repo Rate) from 4.25 % to 4.50 % in an effort to support the Indonesian rupiah which has been under heavy pressure in recent weeks. In theory a rate hike is negative for stocks. However, we would not be surprised to find out Indonesian stocks react positively to some rate hike tomorrow.
Meanwhile, Rekomendasi Saham Gratis is moving flat so far on Friday (18/05), shifting from green to red and back. Apparently, investors are confused whether to invest now (and make use of the recent decline of Indonesian stocks) or avoid investing as stocks may decline further within the next number of trading days.