Morning Dew - September 6th 2013

Key Points

• Under pressure rupiah led to the decline of JCI on Thursday. The index fell to as low as 4015 after it went up to as high as 4123. The fall stopped just around the support area of 4022-26 and subsequently the index settled the day at around 4050. While there is a possibility that the JCI will hold above 4000 for now, should this support fails to hold the index may slump further to 3936-3978. Alternatively, a successful rally beyond 4206 will revive the possibility for a rally to 4373.
• US data released on Thursday showed that private sector added 176k of new jobs in August, slightly below the expected 180k and down from July's reading of 198k. Jobless claims were also down slightly from 332k in the prior week to 323k during the week ending August 31st. Elsewhere, factory orders fell 2.4% in July after it rose 1.6% in the prior month. The fall was less than expected decline of 3.4%. Also, US non-manufacturing sector gained from 56 to 58.6 in August.as ISM data exceeded the expected reading of 55.0.
• Nonfarm payrolls data will be the key release this Friday.The payrolls data is expected at 180k, up from 162k last July. Unemployment rate however, is seen stable at 7.4%. Beyond NFP, the market will set its eyes on the FOMC meeting in the middle of September.
• Strong influence from the USDIDR exchange rate will once again sets the tone for Friday. Continued weakness in IDR will risk for another fall in JCI. No change in view on the recommendations and no new additions as well for now.

Click here to download the full update (PDF)