Investors responded negatively to speculations of a September FFR increase of +100Bps at the FOMC Meeting next week. CME FedWatch starts projecting a +100Bps September FFR increase probability of 18%, from the previous +75Bps 82% increase, responding negatively to the August YoY US Core Inflation rate to 6.3% (Vs. Surv. 6.1%; Jul. 5.9%).
Amid positive sentiment of producer-level deflation, Nasdaq rose 0.7% after falling more than 5% on Tuesday. US MoM Final Demand PPI data for August recorded -0.1% deflation (Vs. Surv. -0.1%; Jul. -0.4%) or continued deflation for the second month in a row, providing slight positive sentiment on Wall Street, after CPI MoM for the same period surprisingly recorded an inflation at +0.1% (Vs. Surv. -0.1%; Jul. +0.0%), amidst falling gasoline and gas prices in August.
The government set the FR98 coupon at 7.125%. Based on data from DJPPR, the Government managed to obtain funds worth IDR 19 trillion, from a total of seven series at the SUN auction yesterday.
FFR Predicted to Rises +100Bps, Core Inflation approaches 7%. Dow Jones fell 1,200 points, a risk-off as technology stocks are sensitive to higher FFR.
SUN Benchmark strengthened earlier in the week, amid investors still calculating the impact of the increase in subsidized fuel. Previously, BI reported that the inflation rate until the second week of September 2022 was 0.77% MoM, with the main commodities contributing to inflation including gasoline, rice and transportation fares.
September 2022 seen as the peak of the Fed’s Hawkish stance, Wall Street consistently moved in the Green at the beginning of the week. Investors combined projections that the US is entering a period of deflation, with a forecast of a +75Bps hike in September FFR, drawing the conclusion that the Fed’s Hawkish peak will occur this month.
JCI forms a support level of 7,200 ahead of 4% BI 7DRRR in September. Energy rose 3.7%, leading sectoral gains for the week, as the European continent’s energy crisis pushed coal prices on the Newcastle ICE market to hit a new record level of USD461.07/Ton, or up nearly 6% after Gazprom stopped indefinitely supplying natural gas to the Eurozone.
SUN Benchmark strengthened over the weekend, amid sentiment from the European continent’s energy crisis that the price of coal on the Newcastle ICE market touched a new record level of USD461.07/Ton, or up nearly 6% after Gazprom stopped indefinitely supplying natural gas to the Eurozone.
Technical rebound ahead of August CPI data. Nasdaq gained more than 2%, leading Wall Street’s gains ahead of Aug. US CPI YoY data which is projected to record inflation sloping to 8.1% (Vs. Jul. 8.5%).
