- The Bank of Japan's plan to halve its bond purchasing program will be crucial for the Yen, triggering concern about carry trade unwind risk.
- While not entirely immune, Indonesia's impact should be manageable due to its low foreign position and minimal Yen-denominated debt. Despite recent positive economic data, Fed rate cut expectation in Sept remain firmed. BI will also limit the issuance and ownership of SRBI.
HIGHLIGHTS
- Risk of Yen Carry Trade Unwind
- The Key Impacts
- For the Indonesian market
- Fed’s Rate Cut Intact Despite Recent Positive Data
- Preventing Market Disharmony – competition for liquidity
- Capital Market – Foreign Inflow Momentum Start to Dissipate
- Fixed Income Flows
- State Sharia Securities (SBSN) Auction Plan: July 30, 2024
This Week Key Focus
- US FOMC – August 2024 (Thursday)
- BoJ Policy Rate – July 2024 (Wednesday)
- BoE Policy Rate – August 2024 (Thursday)
- US Non-Farm Payroll – July 2024 (Friday)
- Indonesia Inflation – July 2024 (Thursday)
Last week Key Events
GLOBAL UPDATES
- China’s 1Y and 5Y LPR increased by 10bps each to 3.35% and 3.85%, respectively
- US GDP increased at a 2.8% annualized rate in the 2Q24,
- US Core PCE, Fed’s preferred inflation gauge, rose 0.2% m-m in June-24
DOMESTIC UPDATES
- Money supply growth reached 7.8% y-y in Jun-24
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