Fed Funds Rate Up in March?
JCI rebounded on Thursday after it slumped a day earlier. The index has been moving within a narrow range so far as there has been a lack of significant catalysts to push it up or down.
The most highlighted comment for Thursday would be the one coming from James Bullard. The St. Louis Federal Reserve Bank president said that rates could rise as soon as March next year. This would be much sooner than most investors are currently expecting. PR expects Fed Funds rate to be raised around mid-2015, about six months after the Fed finished its tapering.
Earlier this month, Janet Yellen said that the Fed’s monetary policy along with rising property and equity prices as well as better global economy would lead to above-trend growth. She downplayed concerns over asset-price bubbles and inflation, which was translated and summarized as: no need to rush to raise the rates.
USDIDR continued to push higher beyond the 12k mark to 12,091 on Thursday, up from 12,027 a day earlier.
US Jobless Claims
US jobless claims ticked down from 314k to 312k in the week ended June 21st. Market had expected claims to have fallen to 311k.
Personal Consumption Expenditure (PCE), one of the Fed’s key variables for setting its rate policy has gained 1.5% YoY in May, slightly faster than 1.4% gains seen in April. The core PCE also gained 0.2% MoM in the same period, in line with the market consensus and at the same pace as April’s.
Personal income gained 0.4% in May vs. 0.3% seen in April while personal spending gained 0.2%.
Technically Speaking...
JCI continued to fluctuate within its consolidation range between 4,775-4,909 after being knocked on Wednesday.
Prior 50-day EMA has turned into resistance at 4,870 while the next one lies at 4,909, followed by 5k and subsequently at 5,091. Beyond the latter the index will aim at 5,251 – the all-time high seen last year.
Next support is now seen at 4,800 and 4,775-4,780 afterwards where the 100-day EMA lies.
MACD inched slightly higher but still below the zero line while RSI has continued to seesaw near the neutral zone. Volume went up a bit.
DILD hit its stop level at 439 and the reco exited at 10.41% losses.
Day Ahead
JCI is seen to continue trading within the confine of its consolidation range as the market essentially awaiting for the upcoming July 9th presidential election. USDIDR remains weak as the pair ended the day at 12,091. The index could still weaken to 4,770-4,800, but it is likely to be limited on both sides. Upside is seen capped at around 4,909.
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