Economist: Market Players Will Welcome Positive Prabowo-Gibran Inauguration
JAKARTA The capital market economist and practitioner, Hans Kwee, stated that financial market players would positively welcome the inauguration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka which was held on Sunday, October 20.
Hans added that the market will also provide a positive reaction if Sri Mulyani Indrawati is again appointed as Minister of Finance. He noted that the rupiah exchange rate, the Composite Stock Price Index (JCI), and the bond market showed a strengthening. "JCI has the opportunity to strengthen with support at the level of 7,600 to 7,521 and resistance at the level of 7,800 to 7,950," he explained.
On the other hand, some international sentiment will also affect the attitude of financial market players. This includes US economic data, European Central Bank (ECB) policies, stimulus from China, and geopolitical tensions in the Middle East.
Hans explained that retail sales data and unemployment claims in the US were better than expected. "This better US economic data encourages the probability of cutting 25 basis points (bps) at the meeting in early November 2024 to increase," he said.
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He also noted that a 44 bps cut until the end of the year could indicate that cuts in November 2024 are likely to be the last, especially if Donald Trump wins the US General Election (Pemilu). Trump's more aggressive policies could impact higher inflation, increase bond yields and strengthen the dollar.
From Europe, Hans noted that the ECB policy to cut its benchmark interest rate could have a positive impact on financial markets, although the European economy is still facing a slowdown. Stimulus from China is also expected to strengthen the financial market, especially the stock market, amid the economic challenges facing the country.
"Oil prices tend to weaken along with China's weak economic conditions, while the potential for peace in the Middle East conflict also affects oil prices," Hans Kwee concluded.