Cooling Down
Inflation cooled in April as Friday’s data showed CPI deflated by 0.02% (month-on-month) after a 0.08% gains in prior month. Last year, the CPI also fell by 0.1% (month-on-month). Year-on-year, the CPI eased to 7.25% from 7.32% seen last month.
Trade balance recorded a surplus of US$673 million in March as exports stood at US$15.21 billion and imports stood at US$14.54 billion. Last February, the surplus was at US$843.4 million. For the first 3 month of 2014, the total accumulated surplus stood at US$1.07 billion.
Manufacturing activity accelerated in April as shown by the HSBC Markit Purchasing Manager’s Index (PMI). The index ticked up from 50.1 in March to 51.1 in April. A reading above 50 marks expansion and below 50 signifies contraction.
USDIDR edged higher to 11,537 from 11,532 on Wednesday.
US Payrolls
US economy added 288k nonfarm employment in April, the best monthly gains since early 2012. February and March figures were revised up to 222k and 203k, respectively. Previously, the both were reportedly gaining 197k and 192k, respectively. Jobless rate fell sharply to 6.3% from 6.7%. The fall was caused by shrinking labor force, instead of significant increase in hiring. Consensus for both data were 215k for payrolls and 6.6% for jobless rate.
Technically Speaking...
JCI continued to gyrate around 4,800-4,850 as the consolidation continues.
Developing on the daily chart is the head-and-shoulders pattern with the neckline projected around 4,750 or just above the 50-day EMA. The left shoulder is at 4,903, the head at 4,933 and 4,916 is so far the right shoulder. Volume shows decreasing pattern from the left shoulder to the right one, adding credibility to the pattern.
JCI needs to break through the nearest resistance seen at 4,933 to negate the H&S pattern. Higher, subsequent resistances lie at 5,000 which is the psychological resistance and later the projection target at 5,063.
MACD declined, moving away from the zero line while the RSI curve continued to turn lower as the odds for deeper setback looms large.
Week Ahead
PDI-P’s presidential candidate Joko Widodo said that his running mate will be announced sometime next week around May 9th 2014, plus minus one day. The official election result will be due on May 9th, which will finally bring clarity to the current political uncertainties. Positive economic data on Friday could support the JCI during the first half of the coming week.
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