JCI Higher Ahead of Consumer Confidence Report


Written by Lukman Otunuga, Research Analyst at FXTM

Indonesia’s Rupiah lost ground against the Dollar while the Jakarta Composite Index ventured higher on Wednesday, as investors awaited Indonesia’s consumer confidence report for November. Positive sentiment towards the largest economy in Southeast Asia, is likely to be elevated further if an increase in consumer confidence suggests signs of improving economic stability. Overall, this has certainly been an interesting year for Indonesia’s economy which Bank Indonesia has predicted to expand between 5% – 5.02% year-on-year (YoY).

With investment and government consumption rising stronger than initially estimated this year, the outlook beyond 2017 continues to look encouraging. The growth of exports by 18.39% in October remains highly supportive of GDP potential and should continue to boost investor confidence towards the nation.

Focusing on the foreign exchange, the Rupiah has weakened against the Dollar with prices trading towards 13538 as of writing. With anticipation likely to mount ahead of the USD NFP report on Friday, the USDIDR could turn volatile.

Global stocks under pressure

Global equity bulls were nowhere to be found during Tuesday’s trading session as market players evaluated the possible impact of proposed US tax cuts. World stocks were mostly lower amid a global technology selloff, with the lack of appetite for riskier assets punishing European shares and Wall Street.

Asian markets stumbled lower during early trading on Wednesday, following Wall Street’s overnight decline. With the renewed Brexit uncertainty likely to tarnish risk sentiment further, European stocks remain vulnerable to further downside.  American shares are still at risk of extending losses, if concerns heighten over a potential US government shutdown on Friday if a spending bill is not approved.

US ADP NFP report in focus

The Greenback edged slightly lower against a basket of major currencies on Wednesday, ahead of the US ADP private sector jobs data for November.

It is becoming increasingly clear that the Dollar remains highly sensitive to the progress on tax reform legislation and this is reflected in price action. Although, Senate passed its version of the tax bill over the weekend, investors remain cautious as the Senate and the House of Representatives still need to reconcile their differences and agree on a final bill to send to Donald Trump.

Technical traders will continue to observe how the Dollar Index behaves below 93.50. A breakout above 93.50 may encourage a further incline higher towards 93.80. Alternatively, a failure for prices to break above 93.50 could open a path back towards 93.00.

Bitcoin does it again

Bitcoin displayed its brawn and unyielding resilience to financial market volatility on Wednesday as prices marched to fresh record highs above $12300.

The CBOE Global Markets and CME group have fuelled investor attraction and legitimised Bitcoin’s investment profile by planning to launch futures that track the cryptocurrency. The explosively bullish price action is likely to continue attracting investors from all directions and as such this has the ability to support further upside. Although Bitcoin has appreciated by a mind-bending 1100% since the beginning of the year, bulls seem far from tired with the next technical level of interest at $12500.

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