{"id":2623,"date":"2021-07-27T15:40:03","date_gmt":"2021-07-27T08:40:03","guid":{"rendered":"https:\/\/star-am.com\/?p=2623"},"modified":"2023-08-22T03:06:55","modified_gmt":"2023-08-22T03:06:55","slug":"star-insight-market-update-26-juli-2021","status":"publish","type":"post","link":"https:\/\/star-am.com\/en\/2021\/07\/27\/star-insight-market-update-26-juli-2021\/","title":{"rendered":"STAR Insight, Market Update 26 July 2021"},"content":{"rendered":"

<\/span><\/div><\/div><\/div>

All eyes on Fed Meeting this week<\/b><\/span><\/p>\n

    \n
  • US equity rise despite mixed data results<\/b><\/li>\n
  • Dollar and Yen rises ahead of FOMC meeting<\/b><\/li>\n
  • JCI and bond yield were positive despite foreign outflow<\/b><\/li>\n<\/ul>\n

     <\/p>\n

    Positive performance of S&P500 despite mixed data results<\/b><\/span><\/p>\n

    Markit US Manufacturing PMI showed positive results last week, recorded at 63.1 for July, higher than the market expectation of 62.0. For Markit US <\/span>Services PMI, the actual number in July recorded lower than consensus <\/span>estimation, 59.8 actual versus 64.5 estimated. Despite these mixed data <\/span>results, S&P 500 jumped 3.6% last week, and Dow Jones was also up by <\/span>3.2%. All sectors in the S&P500 index performed positively, led by the <\/span>communication services sector which increased by 4.97%. US Dollar index <\/span>was relatively flat last week, decreased by 0.03%, while 10Y treasury yield <\/span>was down 1.4bps to 1.27% last week, due to anticipation for FOMC’s <\/span>meeting regarding stimulus tapering. The Fed’s two-day meeting will <\/span>conclude on Wednesday. Policymakers are expected to discuss plans to <\/span>slowing down the Fed’s monthly bond purchases.<\/span><\/p>\n

    Risk sentiment declines ahead of Fed\u2019s meeting, Dollar and Yen rises<\/b><\/span><\/p>\n

    US dollar started the week stronger against riskier currencies, like the Australian dollar, followed by the safe-harbor Japanese yen, as rising <\/span>COVID-19 cases and a decline in Asian equities set a cautious tone ahead <\/span>of Federal Reserve’s meeting this week. Compared to the Australian dollar, <\/span>the US dollar and Japanese yen rose 0.2% to $0.7351 and 0.5% to 81.08 <\/span>yen per Australian dollar respectively. Against the dollar, the yen added 0.2% <\/span>to 110.32 helped by a decline in US Treasury Yields. The Dollar Index <\/span>slipped slightly to 92.833 due to pressure from the euro and yen, but still <\/span>close to its three-and-a-half-month high of 93.194. Some analysts project the <\/span>dollar would continue to strengthen this week due to the possibility of the Fed <\/span>moving a step closer to tapering after the conclusion of its two-day policy <\/span>meeting on Wednesday.<\/span><\/p>\n

    JCI and bond yield improved further despite foreign outflow<\/b><\/span>
    \n<\/b><\/p>\n

    Despite the COVID-19 case remained relatively high in Indonesia, recording 34,257 new cases on Friday, JCI managed to book a 1.4% gain last week <\/span>supported by consumer cyclical (+4.15%) and technology (+4.13%) sectors. <\/span>BI 7-days reverse repo rate is maintained at 3.5% (Fig. 1). We view that JCI <\/span>remained positive last week partly supported by the vaccination rate which <\/span>steadily increased, up to 16.5 million people have been completely <\/span>vaccinated as of 19 July, which represents 6.1% of the total population. <\/span>However, foreign investors recorded a net sell of Rp213bn in the regular <\/span>market with the biggest net-sell on BBCA (Rp90.9bn), DMMX (Rp79bn), <\/span>ANTM (Rp59.9bn), and UNVR (Rp51.2bn).<\/span><\/p>\n

    On the bond market, despite foreign investors’ net-sell of approximately Rp1.8tn, Indonesia’s 10Y government bond yield was down by 6.2bps last <\/span>week as domestic bond-buying remained strong.<\/span><\/p>\n<\/div><\/div><\/div><\/div><\/div>

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