Despite the selloff on Wall Street overnight where the Dow Jones Industrial Average plunged 1.9 percent, the S&P 500 tumbled 2.23 percent, while the Nasdaq Composite dropped 2.74 percent, losses in Asia were less severe on Tuesday morning (03/04) as these losses were kept below 1 percent, overall. The selloff on Wall Street, partially driven by a sell-off of tech industry giants, was the weakest start of the second quarter for US shares since the Great Depression.

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After the World Trade Organization (WTO) had ruled, largely, in favor of Indonesia (in January 2018) in the battle between Indonesia and the European Union (EU) regarding the latter's anti-dumping duties on Indonesian biodiesel exports, Indonesia has now also won its appeal at the EU court. The European Court of Justice, the highest court in the EU, ruled that the bloc needs to scrap its anti-dumping duties on imports of Indonesian biodiesel products that range between 8.8 - 23.3 percent.

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With Donald Trump in office there exists huge volatility in terms of politics, foreign diplomatic relations, and trade-related policies. One day the US is on the brink of a "fire and fury" war with North Korea, then the next day Trump and North Korean leader Kim Jong Un agree to meet for talks. One day the US shocks the world by announcing steep steel and aluminum import tariffs, the next day trading partners are invited to negotiate lower tariffs. One day Rex Tillerson is US Secretary of State, the next he is fired by Trump through Twitter.

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Rapidly rising US stock futures and a sell-off in the bond market. These are the results of an impressive US jobs report, released by the US Labor Department on Friday morning (American time) or evening (Indonesian time). The US economy added 313,000 jobs in February 2018, the highest increase since October 2015. A huge rise in construction jobs was one of the key supporting factors. Meanwhile, the US unemployment rate stayed at 4.1 percent for a 5th straight month.

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Wilbur Ross, US Secretary of Commerce, stated that the US Department of Commerce issued an affirmative final anti-dumping duty on biodiesel shipments that originate from Indonesia. The statement was released overnight (21/02). The decision was made to improve the situation of local US biodiesel producers as their business was undermined by cheap biodiesel imports from Indonesia (and Argentina).

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Indonesian biodiesel producers are in search of new export markets after the USA announced to introduce heavy anti-dumping duties and anti-subsidy rates on palm oil-based biodiesel imports from Indonesia. The Trade Ministry said Indonesia exported USD $255.6 million worth of biodiesel to the USA in 2016. This constitutes 89.2 percent of Indonesia's total biodiesel shipments.

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In a final ruling, released overnight (09/11), the US Commerce Department set anti-subsidy rates in the range of 34.45 - 64.73 percent for palm oil-based biodiesel imports that originate from Indonesia. This final ruling was slightly lighter than the preliminary 41.06 - 68.28 percent range that was set in August 2017.

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On Monday (23/10) the US Commerce Department issued a preliminary ruling and decided to set anti-dumping duties of 50.71 percent on biodiesel imports from Indonesia. Meanwhile, the USA also set anti-dumping duties, ranging between 54.36 to 70.05 percent, on soy-based biodiesel imports from Argentina.

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Stakeholders in Indonesia's biodiesel industry are waiting for the final ruling of the US Commerce Department regarding the dumping of biodiesel products on the American market. The USA accuses Indonesia and Argentina of subsidizing biodiesel exports, hence leading to uncompetitive US vegetable oils (particularly soybean oil).

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The US government plans to impose 40 percent import duties on biodiesel products that are shipped from Indonesia as the USA accuses the world's largest palm oil producer and exporter of dumping biodiesel products on the American market. As a result US vegetable oils (particularly soybean oil) lack competitiveness.

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On Wednesday (18/12), the Federal Reserve announced to slightly scale back its quantitative easing program starting from January 2014. The reduction of the bond-buying program involves USD $5 billion of mortgage-backed securities and USD $5 billion of US treasury securities. Thus, the Federal Reserve will purchase a total of USD $75 billion worth of bonds per month instead of the current pace of USD $85 billion. For the moment, this policy change has an euphoric effect on global stock markets.

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Wall Street, which was up on Monday (16/12) supported by various economic data, managed to support Asian stock indices on Tuesday (17/12), including Indonesia’s benchmark stock index (IHSG). Investors were back and ready to trade on the Indonesia Stock Exchange. As usual, the big cap stocks were highly popular. The rupiah’s Bank Indonesia mid-rate, which improved slightly, also contributed to the good performance of the IHSG today. The index rose 1.37 percent to 4,182.35 points.

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Throughout the morning, the Indonesia rupiah exchange rate showed volatile movement on Tuesday (10/12). In the Bloomberg Dollar Index, the currency was up 0.45 percent to IDR 11,920 per US dollar at 16:20:51 local Jakarta time. The rupiah's performance is volatile because negative sentiments are brought on by improving economic data from the USA, causing a strengthening US dollar, while positive market sentiments are brought on by the new fiscal policies that were announced by the Indonesian government.

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Indonesia's benchmark stock index (the Jakarta Composite Index or IHSG) continued yesterday's rise on today's trading day (10/12), supported by indices on Wall Street that climbed due to the lower VIX index (Chicago Board Options Exchange Market Volatility Index) although Asia's stock indices were mixed, while the Indonesia rupiah exchange rate continued its decline. Indonesia's manufacturing stocks were up along with consumer, automotive and processed foods stocks.

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Asia's stock indices were up after various US economic data (including non-farm payrolls and consumer confidence) were better than expected, including Indonesia's benchmark stock index (also known as the Jakarta Composite index or IHSG). The index climbed 0.80 percent to 4,214.34 points on Monday (09/12). Supported by foreign net buying, almost all sectoral indices of the IHSG were up. The economic policy package that was released by the Ministry of Economy this afternoon also provided support for the index and the rupiah.

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On the last day of the trading week (22/11), Indonesia's benchmark stock index (IHSG) fell 0.19 percent to 4,317.96 points thereby extending its losing streak to three days as investors remain concerned about the looming end - or at least winding down - of the Federal Reserve's monthly USD $85 billion bond buying program known as quantitative easing (QE3). Foreign investors recorded a net sell of IDR 38 billion (USD $3.3 million). The other indices in Asia were mixed. The Hang Seng and Nikkei were up but the Shanghai Composite was down.

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The Federal Reserve, central banking system of the United States, expects that the current economic recovery of the USA is set to continue. In the minutes of the latest Federal Open Market Committee (FOMC) meeting, held at end-October 2013, it is mentioned that within the next few months the Federal Reserve can start winding down its monthly USD $85 billion stimulus program (known as quantitative easing). The next FOMC meeting, which will shed more light on the future of the bond-buying program, is scheduled for December 2013.

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Contrary to most Asian indices, Indonesia's Jakarta Composite Index (IHSG) managed to post a gain on Thursday (07/11). The IHSG seemed to follow the upward movement of Wall Street on the previous day (06/11) after a number of Federal Reserve officials stated to support the continuation of the Fed's monthly USD $85 billion bond-buying program (quantitative easing). Despite continued foreign net selling, the IHSG index rose 0.82 percent to 4,486.11 points as domestic purchases offset foreign selling.

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On Monday (04/11), Indonesia's benchmark stock index (IHSG) fell 0.21 percent to 4,423.29 points. Besides the negative influence of falling indices across Asia and foreign net selling of Indonesian stocks, the IHSG was also dragged down by the continued depreciation of the Indonesian rupiah exchange rate (against the US dollar). When US manufacturing data showed that manufacturing activity grew faster than expected in October, the US dollar gained and thus the rupiah became pressured.

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Although part of the market players on Indonesia's Stock Exchange (IDX) engaged in profit taking after Indonesia's benchmark index (IHSG) climbed for two consecutive days, the index still posted growth of 0.71 percent to 4,418.64 points on Thursday (03/10). Factors that contributed to today's gain were the depreciating US dollar as no solution has been found yet concerning the shutdown, generally rising Asian stock indices and the positive message that is conveyed in the APEC meeting in Bali.

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