The preliminary version of HSBC's purchasing managers' index (PMI) rose to 48.3 in April 2014 from 48.0 in the previous month, indicating that manufacturing in the world's second-largest economy is still contracting (albeit at a slower pace). As such, China's manufacturing sector has posted a contraction for the last four months, causing concerns about the government's ability to put the country's economic growth back on track. Earlier in April, the government of China announced that economic growth in the first quarter of 2014 had slowed to 7.4 percent.

Agus Martowardojo, Governor of Indonesia's central bank (Bank Indonesia), stated that the country's current account deficit, which hit a record high in the second quarter of 2013 at 4.4 percent of Indonesia's gross domestic product (but eased markedly towards the end of the year), may have exceeded the two percent of GDP mark again in the first quarter of 2014. Indonesia's current account deficit had eased to 1.98 percent of GDP in the fourth quarter of 2013 and market participants had expected the deficit to ease further in 2014. Therefore, Martowardojo's announcement was a disappointment.

Indonesia also still faces ongoing political uncertainty after the 2014 legislative election (held on 9 April 2014) which resulted in a fragmented outcome. In the following weeks, coalitions will need to be made and various names of possible presidential candidates as well as vice-presidential candidates will be mentioned. This is expected to lead to volatile rupiah movement as the market reacts to the latest developments and speculation. The presidential election of Indonesia is scheduled for 9 July 2014.

Bank Indonesia's benchmark rupiah rate (Jakarta Interbank Spot Dollar Rate, abbreviated JISDOR) depreciated 0.91 percent to IDR 11,590 per US dollar on Wednesday (23/04).

| Source: Bank Indonesia

Market participants are also already eagerly awaiting the release of Indonesia's March 2014 trade balance as well as April 2014 inflation. These data will be released by Statistics Indonesia (BPS) at the start of May 2014. Preliminary projections for these data are positive.