Week III May 2020 Latest Publisher and Economic Events Color the movement of regional and domestic markets in the past week. Dri summarizes a number of main points deemed to affect market performance, as follows: Indonesian Economy. Bank Indonesia Board of Governors (RDG) decided to maintain the benchmark interest rate (BI7DRR) of 4.5%, interest rates deposit facility by 3.75% and lending interest rates Facility of 5.25%. The decision was taken by considering the need to maintain the stability of the rupiah exchange rate in the midst of global financial uncertainty, although Bank Indonesia views there is still space for decreasing interest rates as low inflation and to encourage economic growth. Indonesian current transaction deficit fell to USD 3.92 billion (1.4 % of GDP) in the first quarter of 2020, it is much lower than the previous quarter which reached USD 8.1 billion (2.8% of GDP). The reduction in the current account deficit was driven by a decrease in imports in line with slowing domestic demand. On May 18, 2020 the Ministry of Finance held a press conference related to the National Economic Recovery Program (PEN) following the issuance of Government Regulation Number 23 of 2020 (PP 23/2020) regarding the implementation of the program Pen. The total funds provided by the government for the program reached Rp 641.17 trillion. In accordance with PP 23/2020 Pen can be done through the mechanism of placement of funds, state capital participation (PNM) and government investment and state expenditure. At present the Ministry of Finance has completed two pen programs, namely interest subsidy facilities for banking debtors and the program of providing restructuring support through the placement of funds in banking. From the price of commodities, the price of US crude oil (WTI) dropped 2.0% to USD 33.25/barrel at the end Trading on Friday, May 22, 2020 due to fears of economic recovery after the Covid-19 crisis amid an increase in demand from China. However, on weekly the price of WTI crude oil rose 13% due to optimism to the continuation of the COVID-19 vaccine and several countries that would end the Lockdown. Meanwhile, the price of Brent fell 2.6% to USD 35.13/barrel at the end of trading on Friday, May 22, 2020, this week the price of Brent increased 8%. On the other hand, the price of gold rose 0.6% to USD 1,735/ ounce at the close of trading on Friday, May 22, 2020 after being able to touch its highest level since November 2012 amounting to USD 1,751.25/ ounces. However, the gold price weekdly decreased by 0.3%. Japanese economy From the Japanese economy, Japan`s economic growth contracted -0.9% in the first quarter of 2020 after the previous quarter contracted -1.9% Qoq. Consumers limit their consumption while the company cuts investment, labor and production to stay in the midst of the Covid-19 crisis. Japan`s trade games experienced a deficit of JPY 930 billion in April 2020 after the same month the previous year a surplus of JPY 59 billion. Exports fell 21.9% yoy to JPY 5.20 trillion while imports dropped 7.2% to JPY 6.13 trillion. The Japanese inflation rate fell to 0.1% yoy in April 2020 and was the lowest level since November 2016 due to the 19 Pandemi Covid-19 which declined public consumption. The price increase occurs in the component of food ingredients (+2.1% yoy) and clothing and footwear components (+1.4% yoy). Meanwhile, the price decline occurred in the transportation component (-1.2% yoy) due to a decrease in world oil prices. BOJ decided to maintain its short -term interest rates at the level -0.1% at the meeting on May 21, 2020. BOJ also maintains to continue to purchase ETFS and J -Reit. Industrial sector production in Japan fell 3.7% Mom in March 2020, this is the sharpest decline in the industrial sector output since October 2019 due to the spread of COVID-19. The biggest contribution to the decline At level 41.9, this is the sharpest contraction of the manufacturing sector since March 2009 due to the Covid-19 crisis. Meanwhile, Jibun Bank Japan Services PMI rose to the level of 25.3 in May 2020 after the previous month was at level 21.5. European economy. The surplus of the balance of the balance in Europe widened to EUR 40.66 billion in March 2020 from EUR 38.1 billion in the same month the previous year. The trade balance surplus of goods increased EUR 39.68 billion and the secondary income balance deficit fell to EUR 10.34 billion. Meanwhile the Surplus of the Service Balance Surplus narrowed to EUR 3.25 billion and the primary income surplus fell to EUR 8.07 billion. The European inflation rate was revised slightly lower to 0.3% yoy in April 2020, this was the lowest inflation since August 2016. The low inflation of the European region was driven by a decline in energy prices by 9.7% due to the Pandemi Covid -19 and the price war between Russia and Saudi Arabia. Consumer confidence index in the European region rose 3.2 points to the level -18.8 After the previous month was at the lowest level for 11 years namely -22.IHS Markit Manufacturing PMI European region rose to the level of 39.5 in May 2020 from the previous month which was at level 33.4. Meanwhile, IHS Markit Services PMI European region rose to the level of 28.7 in May 2020 after the previous month was at level 12. However The tourism sector.ECB said that the economic growth of the European region in 2020 could be contracted between 5-12%, although steps to increase economic growth were still ongoing. ECB is fully ready to adjust its policies to support the economy in the European region including increasing the size of PEPP (Pandemic Emergency Purchase Program). From the housing sector, the average price The lowest since June 2018 due to the spread of Covid-19 which keeps consumers at home and do not make any transactions. The United States Economy (US) IHS Markit Manufacturing US increased to 39.8 in May 2020 after the previous month was at level 36.1. The increase was driven by business activities that were slowly starting to run in the US in the middle of the Pandemi Covid-19. Meanwhile, IHS Markit Services PMI US also increased to level 36.9 in May 2020 after the previous month was at the lowest level of the time of the recording of 26.7. From the housing sector, the Nahb Housing Price Index in the US in May 2020 rose to the level of 37 after the month Previously at the level 30 which was the lowest level since June 2012. Existing home sales in the US fell by 17.8% to 4.33 million units in April 2020 with an average house price rose 2.2% to USD 286,800. This is a number of home sales figures since September 2009 and is the sharpest decline since July 2010. Meanwhile, the number of housing starts in the US fell 30.2% Mom to 0.891 million in April 2020. On the other hand, building permits In the US in April 2020 also dropped 20% Mom to 1,074 million and was the lowest level since January 2015. From the labor sector, the number of US citizens who filled the unemployment allowance fell to 2,438 million claims in the last week of May 16, 2020, this was the level The lowest since the Covid-19 crisis hit the US. Overall the total unemployment allowances submitted from March 23, 2020 to May 16, 2020 to 38.6 million claims. Week IV May 2020 Several economic indicators that need to be observed next week include: New Home Sales, House Price Index, Durable Goods Orders, Initial Jobless Claim, Pending Home Sales, Personal Spending, Personal Incomejapang: Leading Economic Index, Unemployment Rate, Jobs/ Applications Ratio, Retail Sales, Industrial Production, Consumer Confidence, Housing Starteu: Business Confidence, Economic Sentiment, Industrial Sentiment, Inflation Ratechina: Nbs Manufacturing PMI Indonesia: Danareksa Consumer Confidence Index Source: Danareksa Research Institue