No Inflation Expected in May
JCI zoomed closer to 5k mark after it tumbled a while back. The rally followed through Wednesday’s rise as waves of profit-taking subsides gradually.
Chinese data played its part in supporting the regional mood which, in turn helped support the JCI. Manufacturing sector in May improved slightly to 49.7 but still below 50 mark which separates contraction and expansion. The reading was better-than-expected 48.3 and way above the prior month’s figure.
Chairul Tanjung, the new Indonesian Coordinating Minister for Economic Affairs said that May inflation could turn out to be negative, or deflated as food prices were stable during the observed period.
USDIDR continued to weaken to 11,515 from 11,507 on Thursday.
US Claims
US Initial Jobless Claims for the week that ended on May 17th was at 326k or better than the forecast 310k as well as worse than a week earlier at 298k.
Existing home sales were up 1.3% in April from a month earlier, less than the consensus rise of 2.2% but the figure reversed the prior month’s sales which declined 0.2%.
US Markit Manufacturing PMI for May showed that the preliminary reading increased to 56.2 from 55.4, better than the consensus figure of 55.5.
Technically Speaking...
JCI continued to advance as it’s closing in towards 5k once more stopping short at 4,968.
Beyond the resistance at 5,063/93 the index will aim at 5,251 – the all-time high seen last year.
Support is seen at 4,900 and 4,868 in the short-term and 4,800 afterwards.
MACD and RSI bounced as the index recovered its ground. Volume also ticked up, signaling there is more to be gained in the coming sessions.
No additional recommendation for now.
Day Ahead
China data have lifted sentiment on Thursday, boosting JCI and the regionals. The impact may be carried over throughout Friday, but short week ahead may dampen trading interest, hence sending the market into a conundrum especially with the lack of US data as well as minor moves from the Dow index overnight.
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