Market Insights

We prepare periodic market update which constitutes major events and economics data released during the period, and what to watch out for the period that follows

Market Insight 2022

In summary:

  • The global economy is continue to weaken as shown by the global PMI. All of the sub indicators (outputs, new orders, employment, inventories) are showing a sign of slowdown. PMI contracts further to 49.4 in October. However, EM region, especially in SEA, is showing a resiliency due to strong domestic demand.
  • S inflation is finally eased at 7.7% yoy, the lowest since January and below consensus expectation at 8%. As a result, both stock and bond market went up significantly, pricing in that inflation has peaked and The Fed will start to pivot sooner than planned. However, we still think that the benchmark rate on December will still be hiked by another 50 basis making the Fed Benchmark rate to 4.25-4.5% by the end of 2022.
  • Indonesia inflation soften by 0.1% mom due to lower food prices. We think that the impact of lower purchasing power starts to kick in as shown by lower PMI figure as well which went down to 51.8 from 53.7.
  • Trade balance continue its surplus trend in September, marking the 30th consecutive month of surplus at USD 5 bn. The worrying sign however come in below than expected imports at USD 19.8 bn, +22% yoy (consensus: 33.4% yoy), it is another sign that consumer purchasing power is starting to weaken.
  • Our JCI target remain at 7,200 for the year ended 2022 and still prefer short-medium term bonds.
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