INDONESIA: Country Wrap: BI Worries About Global Growth
Market Summary: The Jakarta Comp roared with the unexpected BI rate cut and is up at new all time highs of 8,046, whilst the currency when the other way falling -0.53% to 16,526. Unsurprisingly bond yields have rallied with the front end in 7-9bps lower and the 10-Yr lower by -3bps at 6.25%
- Bank Indonesia (BI) believes the global economy is still slowing due to the impact of reciprocal tariffs imposed by the United States (US) and continued high levels of uncertainty. The statement was delivered by BI Governor Perry Warjiyo in an online press conference on Wednesday, following the September 2025 BI Board of Governors Meeting (RDG). He explained that various indicators show economic growth is slowing in most countries, with widening disparities between them. (source Antara)
- Economists and business leaders have called on the government to sharpen its demand-side strategy and ensure policy consistency as Indonesia navigates its post-reshuffle economic agenda under President Prabowo Subianto. Speaking at the B-Universe Forum Group Discussion on Wednesday, economist Aviliani said the cabinet reshuffle, particularly the appointment of new Finance Minister Purbaya Yudhi Sadewa, could open up fresh economic opportunities. She said the Rp16.23 trillion ($1 billion) stimulus program and the Rp 200 trillion liquidity injection into five state-owned banks (Himbara) could help revive manufacturing and generate broader growth. (source Jakarta Globe)
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BOBL TECHS: (U5) Trading Closer To Its Recent Lows
- RES 4: 117.710 High Aug 5 and a key resistance
- RES 3: 117.640 High Aug 7
- RES 2: 117.528 50-day EMA
- RES 1: 117.374 20-day EMA
- PRICE: 117.100 @ 05:50 BST Aug 19
- SUP 1: 116.950 Low Aug 15
- SUP 2: 116.840 1.00 proj of the Jun 13 - Jul 11 - 22 price swing
- SUP 3: 116.800 Low Mar 17 (cont)
- SUP 4: 116.637 76.4% retracement of the Mar 6 - Apr 7 bull leg (cont)
A strong sell-off in Bobl futures last Friday highlights a bearish threat, once again. The contract is trading at the bottom-end of the recent range and has pierced support at 116.970, the Jul 25 low and a bear trigger. A clear breach of this level would set the scene for an extension towards 116.849, a Fibonacci projection. Key short-term resistance to watch is 117.528, the 50-day EMA.
EURUSD TECHS: Bullish Outlook
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1730 High Aug 13
- PRICE: 1.1663 @ 06:02 BST Aug 19
- SUP 1: 1.1586 50-day EMA
- SUP 2: 1.1392 Low Aug 1 and bear trigger
- SUP 3: 1.1373 Low Jun 10
- SUP 4: 1.1313 Low May 30
EURUSD continues to trade at its latest highs and a short-term bullish outlook is intact. Moving average studies are in a bull-mode position, highlighting a dominant medium-term uptrend. A continuation higher would expose key resistance and the bull trigger at 1.1829, the Jul 1 high. Clearance of this level would resume the uptrend. Support to watch lies at 1.1586, the 50-day EMA. Major support rests at 1.1392, the Aug 1 low.
JGBS: Tepid 20Y Auction Drives Market Cheaper
JGB futures are weaker and hovering near session lows, -27 compared to settlement levels, after today’s 20-year supply.
- The 20-year JGB auction delivered mixed results across key metrics. The low price underperformed dealer forecasts, according to a Bloomberg poll. Moreover, the cover ratio declined to 3.0853 from 3.1462x in the previous auction. The auction tail did, however, shorten to 0.13 from 0.18.
- Today’s result came despite the 20-year offering an outright yield near its cycle high, 10bps above last month’s level. Moreover, the 10/20 yield curve remained near its recent high, its steepest since 1999.
- "JAPAN VETERAN LDP LAWMAKER KONO: BOJ MUST GRADUALLY RAISE INTEREST RATES AS IT IS UNDESIRABLE TO KEEP REAL BORROWING COSTS NEGATIVE FOR A LONG TIME. 'BETTER TO START EARLY,' WHEN ASKED HOW SOON BOJ SHOULD RESUME INTEREST RATE HIKES. JAPAN MUST REVERSE WEAK YEN, SEEK SOMEWHAT STRONGER YEN." - RTRS
- Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's modest losses.
- Cash JGBs are 1-3bps cheaper, with a steepening bias, across benchmarks. The benchmark 20-year yield is 2.4bps higher at 2.596% versus the cycle high of 2.655%.
- Swap rates are 1-2bps higher, with swap spreads tighter.
- Tomorrow, the local calendar will see Trade Balance, Core Machine Orders and Tokyo Condominiums for Sale data.
