Week II January 2020 The latest publications and economic events have colored the movement of regional and domestic markets in the past week. Dri summarized a number of main points that were considered to affect market performance, as follows: Geopolitical tension between the US and Iran heats up early last week, and gradually subsided last weekend. Iran`s reply by firing missiles to the headquarters of the US army in Lrak, making investor concerns about war increased. However, the US response is softer, by choosing negotiation options with Tehran and additional economic sanctions, succeeded in relieving tension. The majority of Asian stock exchanges moved strengthened last weekend. From domestic, Indonesia`s foreign exchange reserves as of the end of December 2019 reached USD 129.2 billion, increased compared to November 2019`s position of USD 126.6 billion. The position of foreign exchange reserves is equivalent to financing 7.6 months of imports or 7.3 months of imports and payment of government foreign debt, and is above the international adequacy standards of around 3 months imports. This increase was mainly influenced by oil and gas foreign exchange revenue, the withdrawal of government foreign loans, and other foreign exchange revenues of Indonesia`s retail sales in November 2019 grew 0.4% Mom, following an increase of 1.6% Mom in the previous month. Annually, retail sales grew slow down from 3.6% yoy to 1.3% yoy, driven by consumer spending on food and beverage products, as well as household equipment. Sales of BBM products, cultural goods and recreation, clothing, information and communication equipment have decreased. From the Japanese economy, the Jibun Bank Japan Services PMI Bickers fell to the level of 49.4 in December 2019, from the level of 50.3 in the previous month. Japanese service sector contraction signals occur following the decline in new orders received, and production output. Japanese consumer confidence index rose 0.4 points to 39.1 in December 2019, or the highest level since May 2019 and above market expectations, level 38. Japanese consumer confidence in the plan to purchase durable goods, environmental conditions, and revenue growth recorded an increase. Japanese community shopping decreased 2.0% yoy in October, after the previous month also fell 5.1% yoy. The household reduces its expenses with the increase in October Sales Taxes and Typhoon Disasters. From the European economy, indicators of Investor-Sentix Investor Confidence Investors rose to the level of 7.6 in January 2020, from the level of 0.7 in the previous month. This development shows the increase in investor optimism on the future economic prospects of Europe. From the Chinese economy, the Caixin China General Services PMI indicator in December 2019, decreased to the level of 52.5 from the level of 53.5. The expansion of the Chinese service sector slows down with the growth of slowing export orders and declining labor absorption. The price of goods and services at the Chinese consumer level in December tends to be stable (-0.0% Mom) from the previous month. Annually, China`s inflation rate lasts at 4.5% yoy (vs +4.7% yoy expectations). This increase was encouraged to increase the price of food ingredients, especially ahead of the new year LMLEK. From the US economy, the indicator of the PMI JCI Markit PMI rose to the level of 52.8 in December 2019, from the November 51.6 level, which indicated the expansion of the US service sector. The acceleration of the growth of the service sector is encouraged to increase new orders and the absorption of industrial labor. US export values ​​rose to the level of USD 208.6 billion in November 2019, and imports declined to USD 251.7 billion. This brought a US trade deficit in November down to USD 43.1 billion, from USD 46.9 billion in the previous month. Furthermore, the new order received by the US (Factory Orders) manufacturer fell 0.7% Mom in November 2019, Following the growth of 0.2% Mom in the previous period. The increase in orders occurs in electric equipment, furniture, computers, and electronic devices. PMI non-manufacturing ISM indicators in December increase from level 53.9 to level 55. Acceleration of non-manufacturing expansion is supported by increased production and inventory, while new orders, order exports and employment absorption slowly. In the US employment sector, ADP Employment Report shows an additional absorption of non -agricultural private labor in December of 202 thousand positions (vs 124 thousand positions in Buian November). Small, medium, and large US businesses each added to 69 thousand, 88 thousand and 45 thousand positions. The industrial sector absorbs additional labor by 29 thousand positions, while the service sector adds 173 thousand positions. In the manufacturing and mining sector, labor is reduced by 7 thousand positions each, and a thousand positions. Employment data issued by the US government shows the absorption of non-agricultural labor (nonfarm payrolls) in December 2019 increased by 145 thousand positions (vs 164 thousand expectations), Lower than the previous month absorption of 256 thousand positions. The most additional workforce occurs in the retail trade sector and health services, while in the mining sector decreases. The average hourly income (average hour earnings) obtained by the labor grows from 0.3% mom to 0.1% mom (vs +0.3% expectations). The release of US employment also shows a stable unemployment rate at the level of 3.5%. The claim of weekly unemployment allowance (as of January 4, 2020) fell by 9 thousand applications to 214 thousand applications. The average 4 weekly recorded 9,500 applications to 224 thousand applications, or still under the average period of 1967-2020 of 350.8 thousand applications. Sunday Ill January 2020 Some economic indicators that need to be observed next week include: NFIB Small Business Index, Inflation rate, Producer Price Index, Retail Sales, Unemployment Allowance Claim Japan: Core Machine Orders, Producer Price Index, Industrial Output China: trade balance, retail sales, industrial output, fixed asset investment, GDP Q4 2019 EU: Industrial output, trade balance, inflation rate Indonesia: Trade Balance, Source Car Sales: Danareksa Research Institute Photo by Viviana Rishe On Unsplash