Morning Dew - 25 March 2014

Cool in March

March inflation is seen lower than February or even deflated as prices of food commodities expected to ease. March and April tend to see lower inflation as harvest season culminates, BPS stated. Last February saw inflation slowed to 0.26% (MoM) from 1.07% seen in January, while throughout 2013 inflation was at 8.4%.

Russian economy may suffer as US and the EU are likely to impose more sanctions on the country which just annexed Crimea from Ukraine. The economy risks two quarters of recession, whilst the S&P and Fitch cut their outlook on 

Russian credit grade to negative from stable. Moody’s however, maintains the outlook at stable so far.

JCI climbed back up on Monday, maintaining its prospect of hitting 5k in the medium-term.

USDIDR fell to 11,384 from 11,431 on Monday.

Manufacturing Slowdown

US PMI for Manufacturing (Preliminary) edged lower to 55.5 in March from 57.1 a month earlier and lower than consensus of 56.5.

US Chicago Fed National Activity Index for February inched higher to 0.14 from -0.45, better than the consensus  of  0.08.

China PMI for Manufacturing fell to 48.1 in March from 48.5, against the consensus of a rise to 48.7. Reading below 50 marks contraction, above 50 means expansion.

Technically Speaking...

JCI clawed its way back above 4,720 on Monday, but short-term outlook seems fragile at the moment.

Recent peak-turned-support at 4,665 will be the next line of defense where this level was also the prior resistance-turned-support.

As the index fell, the nearest resistance shifts to 4,802, while the next one is seen at 4,917, ahead of 5,000 which is the psychological resistance and subsequently the projection target at 5,063. 

Volume continued to tick down, while MACD has turned negative. RSI has curled up a bit after some downticks.

Day Ahead

Politics, Ukraine, manufacturing slowdown and echoes from the Fed’s blueprint of its monetary policy as well as more financial results released will shape the market this Tuesday.  With weak footing on the European front and sagging US front, JCI is seen taking a step back as well on Tuesday’s session.

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