INDONESIA: Country Wrap: Growth to Reach +5.2% - 5.6%
May-21 05:32
- Indonesia’s government bond auctions received bids over four times the amount offered at a recent bond sale as market sentiment appears to be improving. The government raised 28 trillion rupiah ($1.7 billion) from the auction of bonds and T-bills, said the finance ministry’s debt management office in a statement late Tuesday. Total bids amounted to 108.33 trillion rupiah, the largest since August 2021 (source BBG)
- Indonesia plans to achieve an economic growth rate between 5.2% and 5.8% in 2026, Finance Minister Sri Mulyani Indrawati announced, according to Antara. This target is part of the nation’s 2026 Macroeconomic Framework and Fiscal Policy Principles, surpassing this year’s goal of 5.2%. Addressing the 18th Plenary Session of the House of Representatives in Jakarta, the minister explained that this growth range is designed to build a foundation for Indonesia’s longer-term ambition of reaching up to 8% growth in the coming years. To meet these objectives, the government will focus on sustaining consumer purchasing power, reforming economic structures, promoting downstream processing of natural resources, improving the investment climate, and enhancing human capital quality. (source BBG)
- The Jakarta Composite's strong period continues up +0.67%, ahead of the Central Bank decision today.
- The rupiah has done very little as it too waits for the BI. – IDR16,423
- Bonds were better bid as the market expects a cut. 10YR 6.83% (-0.5bps)
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INDONESIA: Trade Surplus Widens In March, Highly Exposed To China
Apr-21 05:18
Indonesia’s March trade surplus widened to $4.33bn, highest since November, from $3.117bn when a narrowing had been forecast. Exports were stronger than expected rising 3.2% y/y when a 2.4% fall had been expected. Imports grew 5.3% y/y up from 2.3% in February but moderately slower than forecast. The data are too early to show any impact from the US’ increased trade protectionism with the universal 10% tariff not implemented until this month.
Indonesia merchandise trade balance US$mn vs 3-month ma
Source: MNI - Market News/LSEG
- USDIDR is around 16804 today after a high of 16840 on Thursday. The fall in the pair is due to broad-based US dollar weakness (BBDXY USD index -0.7%) following comments from US President Trump that the Fed should cut rates and threats that he may replace Chairman Powell.
- The US administration announced a 32% duty on imports from Indonesia as part of the reciprocal tariff package. At this point, it has been delayed and Indonesia hasn’t retaliated. It expects a deal with the US within 60 days. Indonesia is highly exposed to China though with 24% of 2024 exports going there, while 10.6% were shipped to the US. Thus it is highly vulnerable to an unresolved US-China trade war.
- March non-oil & gas annual export growth was driven by agriculture +32.8% y/y and manufacturing +9% y/y, with shipments to all major destinations posting positive annual growth, except to India.
- Q1 nominal exports rose 6.9% y/y and imports around 1.5% y/y.
Indonesia goods exports vs imports y/y% 3-month ma
Source: MNI - Market News/LSEG
CHINA: Country Wrap: Loan Prime Rates on Hold
Apr-21 05:11
- Chinese plastics factories that depend on ethane gas that is predominantly imported from the US are may be forced to limit production as the world’s two largest economies go head to head in a trade war. (source BBG)
- The benchmark lending rates in China remained unchanged this month at 3.1% for the 1-year and 3.6% for the 5-year as officials patiently wait to see how the trade war plays out across the economy before they alter policy. (source DJ)
- The Hang Seng rose +1.6% today for one of the biggest gains in the region, with the CSI 300 not as euphoric rising just +0.15%, Shanghai Comp +.30% and Shenzhen Comp +0.99%.
- Yuan Reference Rate at 7.2055 Per USD; Estimate 7.2926
- China’s 10YR rose +1bp today to be at 1.66%
GOLD: Gold Surges as USD Struggles
Apr-21 04:55
- Playing catch up after a closed period Friday, gold jumped in early trading in the Asia morning to reach new all-time highs.
- Opening at US$3334.44, gold has touched a new high of $3,376.03.
- This takes gold year to date gains in excess of 28% and is causing forecasters globally to reset their year end expectations.
- Gold sits above all major moving averages, with the nearest the 20-day EMA of $3,158.88
- A strong day for China bourses yet mixed throughout the region despite the weaker USD.
