INDONESIA: Country Wrap: CPI Continues to Rise in July
Aug-01 05:09
- The Indonesian central bank intervened in foreign-exchange markets to stabilize the rupiah after the Federal Reserve’s hawkish tone sent the dollar surging to a two-month high overnight. “The central bank ensures the stability of the rupiah to be in line with its fundamental value through various measures in the market,” Bank Indonesia executive director for monetary and securities management told Bloomberg News in a text message on Thursday. (source BBG)
- Indonesia is still discussing with Washington regarding the list of goods that will get a lower rate or be exempted from tariffs in the US, which may include processed copper, says Coordinating Economic Minister (source BBG)
- Indonesia's YoY CPI in July rose to it's highest since June 2024 at 2.37%. As deflationary pressures appear to be moderating the Central Bank's decision to cut rates at their last meeting could be there last for awhile now if the upward trend continues. Indonesia's CORE CPI moderated to +2.32 from 2.37% the month prior. Both CPI and CORE CPI now sit at the centre of the Central Bank's inflation bands and provide time for the BI to pause on further rate cuts to allow the impact of July's cut to impact the economy. (source MNI)
- Indonesia's June export result of a YoY increase of +11.29% comes prior to the agreement with the US on a tariff proposal, beating estimates of +10.21%. Exports to US +25.13% YoY to $2.7b; trade surplus $1.9b, Exports to China +13.72% YoY to $5.4b; trade deficit $2b. Imports in June were substantially lower than forecasts at +4.28% (est. 6.33%) against the prior month's revised +4.71%. The result being a trade surplus of $4.11bn down from the prior month of $4.3bn. In July, Indonesia had become the second Asian nation to reach an agreement with the US, following President Donald Trump's launch of his tariff war on the world in April. The US would pay no tariffs to Indonesia under the deal, while goods from the South-east Asian nation would face a 19 % tariff. President Trump had threatened Jakarta with a 32 per cent tariff rate, effective August 1 before reaching the negotiated result. (source MNI)
- The Jakarta Comp is up +1.17% today to recover from mid week losses and sneak into weekly gains just over +0.30%. The index had a strong July up just over 8% for its best month of the year.
- The Rupiah continues to struggle down again today by -0.20% and over 1% weaker for the week.
- Bonds have sold off this week with the 10-year +6bps for the week at 6.58%
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GBPUSD TECHS: Fresh Cycle High
Jul-02 05:09
- RES 4: 1.3852 1.764 proj of the Feb 28 - Apr 3 - 7 price swing
- RES 3: 1.3835 High Oct 20 2021
- RES 2: 1.3800 Round number resistance
- RES 1: 1.3789 High Jul 01
- PRICE: 1.3741 @ 06:09 BST Jul 2
- SUP 1: 1.3632/3586 High Jun 13 / 20-day EMA
- SUP 2: 1.3439 50-day EMA
- SUP 3: 1.3338 Trendline support drawn from the Jan 13 low
- SUP 4: 1.3140 Low May 12 and key support
A bull cycle in GBPUSD remains in play and a fresh cycle high Tuesday reinforces bullish conditions. This maintains the price sequence of higher highs and higher lows. Note too that moving average studies are in a bull-mode position, highlighting a dominant medium-term uptrend. Sights are on 1.3800 next. Initial support to watch lies at 1.3586, the 20-day EMA. A break would signal scope for a corrective pullback.
AUSSIE BONDS: Cheaper, Narrow Ranges Ahead Of Key US Data
Jul-02 05:05
ACGBs (YM -4.0 & XM -2.5) are modestly weaker after trading in narrow ranges.
- Cash US tsys are little changed in today's Asia-Pac session after yesterday's twist-flattener. Wednesday's US data focus is on MBA Mortgage Applications at 0700ET, Challenger Jobs at 0730ET followed by ADP Employment Change at 0815ET. No Fed scheduled Fed speakers. Thursday is a heavy data day with NFP added due to Independence Day holiday closure on Friday.
- Cash ACGBs are 3bps cheaper with the AU-US 10-year yield differential at -11bps.
- Today’s Jun-35 auction showed solid pricing for ACGBs, with the weighted average yield coming in 0.45bps below prevailing mid-yields. However, the cover ratio nudged lower to 3.3625x. The AOFM plans to sell A$1000mn of the 2.25% 21 May 2028 bond on Friday.
- The bills strip has bear-flattened, with pricing -1 to -4.
- RBA-dated OIS pricing is slightly firmer across meetings today. A 25bp rate cut in July is given a 95% probability, with a cumulative 82bps of easing priced by year-end (based on an effective cash rate of 3.84%).
- Tomorrow, the local calendar will see Trade Balance and S&P Global Composite & Services PMIs.
BOBL TECHS: (U5) Support Is Intact For Now
Jul-02 05:03
- RES 4: 118.649 1.382 proj of the May 21 - Jun 3 - Jun 5 swing
- RES 3: 118.531 1.236 proj of the May 21 - Jun 3 - Jun 5 swing
- RES 2: 118.390 High Jun 13 and a bull trigger
- RES 1: 118.065 61.8% retracement of the Jun 13 - 16 downleg
- PRICE: 117.720 @ 05:48 BST Jul 2
- SUP 1: 117.530 Low Jun 5 and a key near-term support
- SUP 2: 117.470 Low May 21
- SUP 3: 117.470 Low May 21
- SUP 4: 116.660 Low Mar 27
Bobl futures are unchanged and continue to trade in a range. A bull cycle remains intact, however, the latest pullback has exposed key short-term support at 117.530, the Jun 5 low. Clearance of this level would highlight a stronger reversal and cancel the bull theme. This would open 117.470, the May 21 low. Key short-term resistance has been defined at 118.390, the Jun 13 high. A break of this price point would be a bullish development.
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