Sunday I January 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 that are considered to affect market performance, as follows the development of the US-China trade peace and the Middle Eastern geopolitical escalation brought the volatility of the financial market movement to increase. As is known, the US and China have completed the first phase of trading agreement at the end of 2019, and prepared to signing on January 15, 2020 at the White House. The US will continue to charge a 25% tariff for imports of goods from China worth USD 250 billion, while for imports of USD 120 billion, it is reduced to 7.5%. For import imports from China (including clothing, toys and electronics) worth USD 156 billion planned to be subject to a 15%tariff, finally canceled. As a return for the removal of this tariff, China is committed to buying goods from the US worth USD 200 billion and products US agriculture amounting to USD 40 billion over the next 2 years. China announced it would reduce import tariffs for more than 850 products starting in January 2020. For example, frozen pork import tariffs dropped from 12% to 8% to meet increased domestic demand. Frozen avocado import tariffs dropped from 30% to 7%, and ferronoobium import tariffs from 1% to 0% for high technology development. Geopolitics between the US and Iran increased, after US air strikes reportedly killed Iranian military officials. Concerns of the outbreak of war in the Middle East region suppressed the movement of the majority of regional stock exchanges. Global oil prices rose above USD 68 per barrel and gold commodities climb above the level of USD 1,552 per ounce last week. From domestic, the Indonesian inflation rate in December reached 0.34% Mom or recorded 2.72% annually. Monthly, price pressure increases in food components (+0.78% mom), finished food (+0.29% mom) and transportation (+0.58% mom). Ahead of Christmas, the new year, and school holidays encourage the demand for goods and transportation costs to increase. The December 2019 monthly inflationary pressure was recorded as the lowest monthly inflation since December 2009. This illustrates the weakening of people`s purchasing power towards the end of 2019. At the beginning of January 2020, Pertamina cut the price of a number of non-subsidized fuel with a range of 6.6%-12.8%. The price of Pertamax drops from IDR 9,850/ltr to IDR 9,200/ltr, Pertamax Turbo drops from IDR 11,200/ltr to IDR 9,900/ltr, Pertamina Dex drops from IDR 11,700/LTR to IDR 10,200/ltr, Dexlite drops from IDR 10.200/ltr to IDR 9,500/LTR. From the Japanese economy, the indicator of the Japan Manufacturing Bank Jibun PMI in December 2019, down to the level of 48.4 from the level of 48.9 in the previous month. The contraction of the Japanese manufacturing sector was due to the decline in production output, new orders received by the manufacturer, and the lethargic exports. From the European economy, the Indicator of Manufacturing IHS Markit PMI European Union in December dropped to the level of 46.3 from 46.9 in the previous month. The contraction of the European manufacturing sector was encouraged to decline in new orders received by manufacturers and production outputs. From the Chinese economy, the official manufacturing indicators of the Chinese government in December 2019 were stable at 50.2 as the previous month. Chinese manufacturing sector expansion is supported by increased growth of new orders, output production and export sales. While the Caixin PMI manufacturing indicator dropped slightly from 51.8 to 51.5 in the same month. The growth of new orders and exports slows down, while production output remains uphill. RRR for large banks to 12.5% ​​from 13.0%. From the US economy, the indicator of manufacturing IHS Markit Manufacturing PMI decreased slightly from the level of 52.5 to 52.4 in Buian December 2019. Output and business expansion grew moderate, in the middle Strengthening labor absorption. Unlike the IHS Markit, the PMI ISM Manufacturing Indicator December fell to the level of 47.2 from the level of 48.1 in Buian November. The contraction of the US manufacturing sector still occurs with the decline in new orders, export orders, production and labor absorption. The ISM PMI Bicker is the lowest since June 2009, which was recorded at the level of 46.3. Contracts of houses in stock sales grew 1.2% mom (+7.4% yoy) in November 2019, after the previous month down 1.3% mom (+4.9% yoy). This home sales contract recorded the highest annual increase since Jun 2015. The claim of weekly unemployment allowance (as of December 28, 2019) fell 2 thousand applications to 222 thousand applications. The average 4 weekly recorded 4,750 applications to 233,250 applications from the previous week. Claims of unemployment benefits are still lower than the average during the 1967-2019 period of 350,860 thousand applications. Week II January 2020 Some economic indicators that need to be observed next week include* USA: trade balance, factory orders, adp employment change, claims of weekly unemployment allowances, average income of labor income * Japan: Consumer Confidence Index, Lei, Cei * China: inflation rate, producer price index * EU: retail sales, inflation rate, business climate indicator, consumer confidence index, producer price index * Indonesia: foreign exchange reserves Source: Danareksa Research Institute Photo by Bayu Shaits on Unssplash