DRI M5-Oct-2019: Monetary Policy A number of central banks also affect market performance.

28 October 2019

Research

Sunday v October 2019 the latest publishes and economic events coloring regional and domestic market movements in the past week. Dri summarized a number of main points that were considered to affect market performance, as follows last week, the issuer`s quarterly financial statement release season became the main driving force for the domestic and regional exchanges. On the economic side, the publication of PMI-Flash-Flash-Flash-Flash Development Indicators, and the monetary policy of a number of central banks also affects market performance. Market participants also looked at the development of AS-China and Brexit negotiations. The signing of the first phase of the AS-China trade agreement is expected to occur at the APEC meeting in mid-November. While the rejection of the Parliament of the Brexit proposal submitted by the government, made uncertainty increase. The extension of the Brexit deadline and the Election Election is a continuation of this development. From the domestic, Bank Indonesia in RDG October 2019 re-cuts the reference-7DRR interest of 25 bps to 5.00%, with interest facility and lending facility to 4 to 4 to 4 to 4 , 25% and 5.75%. This policy is taken with consideration of controlled inflational prospects, domestic financial yields that remain attractive, and anticipatory efforts to encourage the momentum of domestic economic growth amidst the global economy. From the Japanese economy, exports and imports in September 2019 each decreased -5 , 2% yoy (vs -4.0% consensus) and -1.5% yoy (vs -2.8% yoy consensus) to JPY 6.37 trillion and JPY 6.49 trillion. This development brought the Japanese trade balance to the JPY 123 billion deficit, from the previous JPY surplus 124.1 billion in August. The sluggish request of the global and the impact of the US-China trade war had an impact on the decline in Japanese exports for 10 consecutive buiaks. Early Indicators of PMI Manufacturing Manufacturing Manufacturing down to the level of 48.5 in October, from the final level September 48.9. The contraction of Japanese manufacturing sector is due to sluggish export demand, decreased new orders and production output. From the Chinese economy, China`s monetary authority maintains a 1-year loan rate of loan rate (LPR) at the level of 4.20% in October, following trimming 0 , 05% in the previous month. While for LPR 5 years also survived at the level of 4.85%. From the European economy, the indicator of the PMI Markit Markit Dini-LHS manufacturing is stable at the level of 45.7 in October 2019. The contraction of the European manufacturing sector still occurs following a decline , and production output. The European-ECB central bank maintains the reference interest policy which is currently in force. Reference-reference rates, marginal lending facility and deposit rates are held respectively at level O percent, 0.25 percent and -0.5 percent. This policy is expected to still run until the actual inflation rate approaches the target of 2 percent in the medium term. The ECB also carried out a policy of purchasing assets and securities-Governing Council`s Asset Purchase Program (APP), amounting to 20 billion euros per month, which began on November 1, 2019. From the US economy, the sale of house stocks fell 2.2% Mom to 5.38 million units in September 2019 (vs. 5.45 million market expectations). Tread house sales have decreased, while for condominium increased. Meanwhile, the sale of a new site (new home sales) in the US slightly decreased 0.7% Mom (+15.5% yoy) in September 2019 to 701 thousand units (SA Annual Rate), or in line with market expectations. Median new home prices fell 8.8% yoy to USD 299.4 thousand. US Manufacturing Indicator Dini-LHS Markit Manufacturing PMI in October rose to 51.5 from the final level of PMI September 51.1. This development has become a moderate increase in US manufacturing in the last 6 months, driven by output growth acceleration, new order and labor absorption. Older goods order received by the US manufacturer (Durable Goods Order,) Decreased 1.1% Mom (vs -0.8 % Mom Consensus) in Buian September 2019, following an increase of 0.3% mom in the previous buian. This is related to the decline in the demand for transportation equipment, metal, electronic and computer products. The claim of US unemployment allowance (as of October 19, 2019) dropped by 6 thousand applications to 212 thousand applications. The average 4 weekly reached 215 thousand applications, slightly decreased 750 applications from the previous week. Week I November 2019 Several economic indicators that need to be examined next week include: consumer confidence conference board, pending home sales, adp employment change, gdp q3 2019, pce index , FOMC Meeting, Personal Income and Spending, ISM Manufacturing PMI, claims of weekly unemployment allowances, unemployment rates, factory orders. Japan: Industrial Production, Jibun Bank PMI, Consumer Trust Index, EU: Business Climate, GDP Q3 2019, Inflation rate, Markit PMI China: PMI Manufacturing, Caixin PMI Indonesia: Danareksa Consumer Trust Development, October 2019 inflation rate, Markit PMI