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 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 other hand, the EU vowed that it must be prepared to negotiate opening its markets wider to US imports – including car shipments – in a bid to avert a potential trade war.
On the May 2018 policy meeting (concluded on Thursday) Indonesia’s central bank (Bank Indonesia) chose to raise its benchmark monthly interest by 25 basis points to 4.fifty percent in an attempt to reduce heavy pressures on the rupiah.
Another issue – the one that is giving rise to geopolitical concerns – is definitely the news that North Korea canceled high-level talks with neighboring South Korea on Wednesday (16/05) since 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 should go-ahead as planned on 12 June 2018.
As opposed to Indonesian bonds and also the rupiah, the Analisa Berita Pasar Modal ended slightly in green territory ( .06 percent) on Wednesday (16/05) after dealing with deep red territory that was touched earlier in the day. Indonesian stocks have already been sliding significantly in the last number of weeks and now have actually become quite attractive, particularly for long term investors. So far in 2018 foreign investors have already been net sellers of about USD $2.9 billion of Indonesian stocks, implying ifhvlq Indonesian equities are definitely the worst performer in Asia so far this 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 percent to 4.50 % in an attempt 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 surprised to find out Indonesian stocks react positively to a 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 take advantage of the recent decline of Indonesian stocks) or refrain from investing as stocks may decline further over the following couple of trading days.