INDONESIA: Q2 GDP Growth Rises, Stronger Than Expected
Q2 Indonesia GDP was stronger than expected rising 5.1% y/y up from 4.9% in Q1 and stronger than Bloomberg consensus at 4.8%. This result was back in line with Q4 after Q1’s dip and was driven by improvements across components. Bank Indonesia cut rates 25bp in July to 5.25% which brought the total easing this cycle to 100bp, which may now be providing some support to growth. Fiscal policy has also been stimulatory.
Indonesia GDP y/y%
- Risks to the growth outlook persist, especially from global factors and their impact on confidence. Indonesia’s government reduced its 2025 growth forecast to 4.7-5% from 5.2%. New fiscal measures are due to be announced on August 15.
- Private consumption growth picked up to 5.0% y/y from 4.9% and was stronger than implied by Q2 consumer confidence but this may weigh on spending in Q3.
- Private investment grew by 7% y/y, the highest in four years and up from Q1’s 2.1%.
- Government spending continued to contract in Q2 but at a slower rate of -0.3% y/y after -1.4%.
- Exports growth jumped to 10.7% y/y from 6.8% as shipments to the US continued to be frontloaded ahead of the revised early July deadline. Originally a “reciprocal” tariff of 32% was to be imposed on Indonesia but that has been negotiated down to 19%. With exports to the US concentrated in H1, there is likely to be payback in H2.
- USDIDR is little changed today at around 16385 but is still 0.7% higher than it was when BI last met.
Indonesia exports y/y%
Source: MNI - Market News/LSEG
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USDCAD TECHS: Trend Outlook Remains Bearish
- RES 4: 1.4111 High Apr 4
- RES 3: 1.4016 High May 12 and 13 and a key resistance
- RES 2: 1.3920 High May 21
- RES 1: 1.3674/3776 20- and 50-day EMA values
- PRICE: 1.3607 @ 16:12 BST Jul 4
- SUP 1: 1.3557 Low Jul 03
- SUP 2: 1.3540 Low Jun 16 and the bear trigger
- SUP 3: 1.3503 1.618 proj of the Feb 3 - 14 - Mar 4 price swing
- SUP 4: 1.3473 Low Oct 2 2024
The trend needle in USDCAD points south and this week’s move down reinforces current conditions. S/T gains between Jun 16 - 23 appear to have been corrective. Key support and the bear trigger is 1.3540, Jun 16 low. Clearance of this level would resume the downtrend and open 1.3503, a Fibonacci projection. Pivot resistance is at the 50-day EMA, at 1.3776. A clear break of this average would signal scope for a stronger recovery.
AUDUSD TECHS: Bull Cycle Remains In Play
- RES 4: 0.6700 76.4% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6688 High Nov 7 ‘24
- RES 2: 0.6603 High Nov 11 ‘24
- RES 1: 0.6590 High Jul 01
- PRICE: 0.6548 @ 16:05 BST Jul 04
- SUP 1: 0.6521 20-day EMA
- SUP 2: 0.6468/6373 50-day EMA / Low Jun 23 and a reversal trigger
- SUP 3: 0.6357 Low May 12
- SUP 4: 0.6275 Low Apr 14
The trend set-up in AUDUSD remains bullish and the pair is holding on to its recent gains. The latest break higher maintains the bullish price sequence of higher highs and higher lows, the definition of an uptrend. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 0.6603 next, the Nov 11 2024 high. Key short-term support has been defined at 0.6373, the Jun 23 low.
EURJPY TECHS: Northbound
- RES 4: 171.88 High Jul 19 ‘24
- RES 3: 171.28 1.382 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 2: 171.09 High Jul 23 ‘24
- RES 1: 170.61 High Jul 03
- PRICE: 170.22 @ 16:04 BST Jul 04
- SUP 1: 169.04 Low Jul 02
- SUP 2: 167.87 20-day EMA
- SUP 3: 167.13 Low Jun 20
- SUP 4: 165.66 50-day EMA
EURJPY traded higher on Thursday resulting in a print above 170.47, the 76.4% retracement of the Jul 11 - Aug 5 sell-off. A clear break of this price point would strengthen bullish conditions and signal scope for extension. This would open 170.28 next, a Fibonacci projection. The trend is overbought, a pullback would unwind this condition. Support to watch lies at 167.87, the 20-day EMA.
