In line with expectations the US Federal Reserve announced to raise its key interest rate by 25 basis points to 1.00 - 1.25 percent after conclusion of the June policy meeting on Wednesday (14/06), its second hike in 2017. It also announced it will soon start its balance sheet unwinding plan, meaning cutting its massive (USD $4.5 trillion) holdings of bonds and securities. The Fed also informed US inflation will remain below its target with core inflation slowing for a fourth month in May 2017. But despite soft inflation, it goes ahead with monetary tightening.

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Ahead of the Federal Reserve's decision, Indonesia's benchmark Jakarta Composite Index surged a whopping 1.49 percent to 5,792.90 points in Wednesday (14/06). The US Fed, which is to conclude its two-day policy meeting later today, is widely assumed to raise its key short-term interest rate by 0.25 percent, which would be the third rate hike in six months. For Indonesian stocks it was a new record high. Not only Indonesia but most stock indexes climbed in Asia ahead of the Federal Reserve decision.

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There are various reasons for investors to be cautious in Asia today. Markets need to digest and wait for political certainty in the United Kingdom and France (where elections brought political uncertainty), while two big central banks (the US Federal Reserve and the Bank of Japan) are in the spotlight this week as they conduct their monthly policy meetings.

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Markets in Asia seem relieved one day after "Super Thursday" as there were no major upsets that rocked stock and currency markets (with the exception of the British pound that depreciated significantly after exit polls suggest the United Kingdom is heading for a hung parliament with May's Conservatives losing the clear majority). Meanwhile, the Comey testimony and ECB policy meeting had no destabilizing impact on Wall Street. Hence, US stocks gave big support to Asian markets on Friday (09/06).

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Most US stocks rose modestly overnight (07/06) as gains in banking shares were stronger than the slump in energy companies that was caused by oil prices sliding 5 percent to a one-month low on Wednesday (07/06). This decline came after an unexpected increase in US crude inventories. Today (08/06) crude oil is slightly recovering. However, market participants are very careful at the start of trading on Thursday.

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The main question today is how markets in Asia will respond to the terror attacks in London and the weaker-than expected US jobs report, both occurring at the end of last week when Asian markets had already closed. Interestingly enough, the bleak US employment data did little to dent investor sentiment in the USA at the end of last week. The three key indexes on Wall Street all rose on Friday, moving closely to record highs.

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On early Monday morning we detect light trading in Asian stock markets. This is mainly because markets in the USA, United Kingdom and China are closed for a public holiday today (29/05), while investors are also awaiting speeches from Federal Reserve and European Central Bank (ECB) officials as well as the US jobs report (due on 2 June). Meanwhile, North Korea again caused rising tensions as it launched another ballistic missile in its latest test.

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Most Asian stocks are in the green zone on Monday morning (22/05), tracking Wall Street's performance on Friday where investors' attention shifted from recent political drama - related to US President Donald Trump - to good corporate earnings of Deere and Caterpillar. Meanwhile, rising crude oil ahead of the OPEC meeting on Friday (May 25, 2017) added positive sentiments to markets. Indonesia is again on track to finish at a new all-time record high.

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It is not a good day for stocks across the Asia-Pacific today. After US stocks on Wall Street tumbled overnight on persistent concerns about political stability in the USA - as President Donald Trump allegedly tried to interfere in a federal investigation by urging former FBI chief James Comey to end a probe into former National Security Adviser Michael Flynn's ties with Russia - Asian stocks are following suit on Thursday (18/05).

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Indonesia's benchmark Jakarta Composite Index fell 0.56 percent to 5,615.49 points on Wednesday (17/05), in line with the performance of stocks across the Asia-Pacific region. The weak performance is caused by increasing concern about the controversial actions and policies of US President Donald Trump. After the emergence of several new scandals over the past couple of days more and more people assume Trump will not be able to finish his presidential term as calls for impeachment are heard.

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The Indonesian rupiah exchange rate depreciated on Wednesday (14/01) as global oil and other commodity prices continued to fall thus casting a negative spell on Indonesia’s currency. The rupiah depreciated 0.11 percent to IDR 12,614 per US dollar according to the Bloomberg Dollar Index. Market participants are concerned about the negative influence of low commodity prices on Indonesia’s export performance. Southeast Asia’s largest economy has had to cope with a wide trade and current account deficit in recent years.

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The Indonesian rupiah exchange rate and Indonesian stocks gained on the last trading day of the week in line with the performance of other emerging markets. Indonesia’s benchmark stock index (Jakarta Composite Index, abbreviated IHGS) rose 0.09 percent to 5,216.67 points, while the rupiah appreciated 0.22 percent to IDR 12,647 according to the Bloomberg Dollar Index. The positive performance was mainly caused by speculation that the unexpected fall in US wages will keep the US central bank from raising its key interest rate soon.

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As several Asian stock indices rebounded on Wednesday (07/01) Indonesia’s benchmark Jakarta Composite Index (IHSG) was able to rise as well. Investors purchased Indonesian blue chips which were considered relatively cheap after two days of decline. However, this may be speculative (short-term) buying as there are still no real domestic or foreign factors that can provide structural support. As such, there is a real possibility that Indonesia’s benchmark index will be back into red territory tomorrow.

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Both the Indonesian rupiah exchange rate and stocks continued to fall on Tuesday (06/01) as global conditions remained unconducive. Indices on Wall Street had declined sharply yesterday as the global oil prices fell below USD $50 per barrel fueling concerns about a weaker global economy. Similarly, most Asian stock indices declined as Japan's yen appreciated and energy stocks were sold by investors. Indonesia’s benchmark Jakarta Composite Index fell 0.98 percent to 5,169.06 points.

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Indonesia’s benchmark stock index (Jakarta Composite Index) fell 0.43 percent to 5,220.00 points on Monday (05/01) amid profit taking on a relatively quiet trading day on the Indonesia Stock Exchange. Meanwhile, the Indonesian rupiah exchange rate depreciated 0.55 percent to IDR 12,614 per US dollar according to the Bloomberg Dollar Index as concerns about Greece exiting the euro intensified and boosted US dollar demand. Moreover, market participants were still reacting to Indonesia’s latest trade and inflation data.

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Despite positive stock indices in the USA and Europe at the end of last week as well as mostly positive indices in Asia today (08/12), the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) fell due to investors’ appetite for profit taking. Several matters made investors decide to sell their Indonesia shares, including the World Bank’s downward revision of Indonesia’s economic growth in 2015, Japan’s recession, weakening Chinese exports, and the sharply depreciating rupiah exchange rate.

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Amid mostly gaining stock markets in Southeast Asia on Tuesday (11/11), the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) rebounded sharply after several days of declines. Most Indonesian blue chip stocks rose considerably after having tumbled in recent days. Positive market sentiments were caused by Joko 'Jokowi' Widodo’s participation in the Asia Pacific Economic Cooperation (APEC) summit in Beijing as well as news that both camps in Indonesian parliament have agreed to work together.

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Although we initially expected that the benchmark stock index of Indonesia (Jakarta Composite Index, abbreviated IHSG) would be supported by the various macroeconomic data (inflation, trade balance, and manufacturing activity) that were released by Statistics Indonesia today, the opposite is what happened. The index went into red territory amid profit taking, although the bond market in fact strengthened and foreign investors recorded net buying at IDR 224 billion (USD $18.7 million).

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The market showed today (27/10) that the composition of Indonesian President Joko Widodo’s cabinet did not live up to expectations. On Sunday afternoon, Widodo had announced the names of the ministers inside his Working Cabinet (Kabinet Kerja) after having delayed the announcement for almost a week as several of his ministerial candidates needed to be replaced having been red flagged by the country’s Corruption Eradication Commission (KPK). This then heightened expectations that Widodo’s cabinet would constitute a ‘dream team’.

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It was a good start of the week for the benchmark stock index of Indonesia (known as the Jakarta Composite Index, abbreviated IHSG). Various factors, both internal and external, managed to push the index higher on Monday (20/10). Externally, the IHSG was supported by positive Asian indices which responded to last week’s good US economic data (building permits, housing starts, and consumer sentiment). Moreover, the sharply appreciating Indonesian rupiah exchange rate made Indonesian assets more attractive.

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