Jakarta Composite Index (IHSG):

Australia's central bank left the door open for an interest rate cut in December in case the country's growth and inflation fail to pick up. Today, the Australian central bank left rates unchanged stating that positive economic prospects have firmed slightly over the past couple of months. As a consequence, Australian shares rose.

Domestically, positive sentiments were caused by Indonesia's easing inflation. After more than two years of high inflation (due to subsidized fuel price reforms), Indonesia's inflation rate eased to 6.25 percent (y/y) in October and will slow more markedly in the next two months as the impact of the November 2014 subsidized fuel price hike will vanish from the annual inflation figure. With Indonesia's current account deficit estimated to have eased to about two percent of the country's gross domestic product (GDP) by the year-end, only the fragile rupiah (amid looming higher US interest rates) stands in the way of an interest rate cut. Currently, Indonesia's benchmark interest rate is still relatively high at 7.50 percent.

Later this week, Statistics Indonesia (BPS) is to announce the country's official Q3-2015 GDP growth figure. It is expected to have improved slightly from the preceding quarter's 4.67 percent (y/y) pace. Investors will also be interested to learn the US payrolls data due on Friday as these may provide some information about the Federal Reserve's monetary policy approach.

The US dollar weakened against most Asian currencies. Based on the Bloomberg Dollar Index, the Indonesian rupiah appreciated 0.78 percent to IDR 13,563 per US dollar. Meanwhile, Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) appreciated 0.64 percent to IDR 13,594 per US dollar on Tuesday (03/11).

Indonesian Rupiah versus US Dollar (JISDOR):

| Source: Bank Indonesia

Markets in Japan were closed for the Culture Day holiday.


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