Wall Street Party, CSO-Rupiah Can Fly
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Indonesian Markets Mixed Amid Global Trade Concerns
Table of Contents
JAKARTA (AP) — Indonesian financial markets presented a mixed picture Wednesday, with the Composite Stock Price Index (CSPI) declining while the rupiah held steady against the U.S. dollar. Government bonds (SBN) experienced selling pressure from investors.
Stock Market Performance
The CSPI closed down 0.47% at 5,967.99, falling below the 6,000 psychological threshold. Trading volume reached approximately Rp12.08 trillion, involving 18.6 billion shares in 1.09 million transactions. Advancing stocks numbered 298, while 307 declined, and 188 remained unchanged.
Foreign investors were net sellers, with outflows totaling Rp1.1 trillion across the entire market.
Sector performance was largely negative,with basic industry leading the decline at 3.07%. the cyclical sector fell 2.24%, and the energy sector was down 1.43%. Conversely, infrastructure and healthcare sectors saw gains of 0.94% and 0.78%, respectively.
The CSPI initially opened strongly, gaining over 1%, but its gains diminished throughout the trading day, ultimately closing in negative territory.
Trade War Impact
The CSPI’s decline coincided with the implementation of new tariffs by the United States. These tariffs, which took effect Wednesday afternoon, impact nearly 60 countries, including Indonesia. While the base tariff was 10% on April 5, some countries face tariffs ranging from 11% to 50%. China experienced a notable increase of up to 104% following retaliatory measures.
Reuters reported that economists warn U.S.consumers are likely to bear the brunt of the trade war through higher prices. A recent reuters/IPSOS poll indicated that nearly three-quarters of Americans anticipate rising prices for everyday goods in the next six months.
Currency and Bond Markets
The rupiah remained stable against the U.S. dollar, closing unchanged at Rp16,860/US$. Intraday, the currency had weakened, nearing Rp17,000/US$.
Yields on 10-year government bonds rose from 7.084% to 7.14%, indicating selling pressure in the bond market. Bond yields and prices move inversely, so rising yields reflect falling prices as investors reduce their SBN holdings.
US Market Surge
U.S. stock markets rallied following an proclamation to postpone some tariffs. The S&P 500 index jumped 9.52%, closing at 5,456.90, marking its largest daily increase since 2008. The Dow Jones Industrial Average rose 2,962.86 points, or 7.87%, closing at 40,608.45, its largest percentage increase since March 2020.
CNBC International reported that approximately 30 billion shares changed hands, making it the highest trading volume day in Wall Street history, according to records for the past 18 years.
According to a post on his Truth Social platform,the former President stated he authorized a 90-day pause and significantly reduced reciprocal rates to 10% during this period,effective instantly. He also indicated plans to raise tariffs on China to 125%.
According to Minister of Finance scott Besent, all countries, except China, will return to the basic tariff of 10%, down from a higher rate that previously shook the market, during the negotiation process. This postponement does not apply to certain sector tariffs,said Best.
External Factors Influencing Domestic Markets
Market sentiment is influenced by external factors, particularly the trade tensions between the U.S. and China. Additionally,the U.S. federal Reserve’s (The Fed) recent policy meeting minutes indicated a desire to slow the reduction of its balance sheet.
FOMC Minutes
the Fed’s minutes revealed a decision to slow the pace of balance sheet reduction, prompted by concerns about the uncertainty surrounding congressional action on the federal government’s debt ceiling.
According to the minutes, slowing or temporarily halting the balance sheet reduction would provide significant protection against a rapid decline in central bank reserves after the debt ceiling issue is resolved.
At its March 18-19 policy meeting, the central bank announced it would reduce the maximum limit for U.S. government debt releases from $25 billion per month to $5 billion,while maintaining a $35 billion limit for mortgage bond releases.
This slowdown in quantitative tightening (QT) was widely anticipated. Though, Christopher Waller, a Fed Governor, expressed skepticism about using securities ownership as a policy tool.
The Fed aims to manage liquidity in the financial system to normalize short-term interest rate volatility and maintain control over key federal interest rates. Though,the debt ceiling issue has clouded market signals.
Without the debt ceiling issue, the Fed would likely continue QT in full. Fed Chairman Jerome powell stated last month that market indications suggested “the amount of reserves is still abundant.”
The Congressional Budget Office projected last month that the government’s ability to manage cash without adding debt would likely run out in August or September.
China’s Economic Data
China is scheduled to release its consumer price index (CPI) data, which previously indicated deflation on both monthly and annual bases.
In February 2025, Chinese consumer prices fell 0.7% year-on-year, exceeding market expectations of a 0.5% decrease.This marked the first consumer deflation since January 2024. The CPI also fell 0.2% month-on-month.
Consensus estimates anticipate annual inflation for China, although deflation is still expected. This situation reflects the ongoing economic slowdown in China, which could negatively impact Indonesia as a trading partner.
U.S.Inflation Data
The United States is also set to release its CPI data,both annually and monthly.
in February 2025, the annual inflation rate in the U.S. slowed to 2.8%,below the January figure of 3% and market estimates of 2.9%. if inflation data continues to decline, it could strengthen the case for the Fed to cut benchmark interest rates, perhaps weakening the U.S. dollar and strengthening the rupiah.
Government Debt
The Indonesian government has withdrawn Rp 250 trillion in new debt in the first three months of this year. This represents 40.6% of the targeted deficit financing. The budget deficit as of the end of March 2025 was Rp 104.2 trillion, or 0.45% of GDP, which is 16.9% of the target set in the 2025 State Budget.
Finance Minister Sri Mulyani Indrawati stated that the government will continue to maintain the state budget, debt, and deficit in a prudent and obvious manner.
Budget financing as of March 31, 2025, consisted of Rp 270.4 trillion in debt withdrawals, reduced by Rp 20.4 trillion in non-debt financing.
The state revenue itself consists of the realization of tax revenue of Rp 400.1 trillion, or equivalent to 16.1% of the target of 2025 Rp 2,490.9 trillion and Non -Tax State Revenue (PNBP) of rp 115.9 trillion or
Indonesian Markets Mixed Amid Global Trade concerns
JAKARTA (AP) — Indonesian financial markets presented a mixed picture Wednesday, with the Composite Stock Price Index (CSPI) declining while the rupiah held steady against the U.S. dollar. government bonds (SBN) experienced selling pressure from investors.
Stock Market Performance
The CSPI closed down 0.47% at 5,967.99, falling below the 6,000 psychological threshold. Trading volume reached approximately Rp12.08 trillion, involving 18.6 billion shares in 1.09 million transactions. Advancing stocks numbered 298, while 307 declined, and 188 remained unchanged.
Foreign investors were net sellers, with outflows totaling Rp1.1 trillion across the entire market.
Sector performance was largely negative,with basic industry leading the decline at 3.07%. the cyclical sector fell 2.24%, and the energy sector was down 1.43%. Conversely, infrastructure and healthcare sectors saw gains of 0.94% and 0.78%, respectively.
The CSPI initially opened strongly, gaining over 1%, but its gains diminished throughout the trading day, ultimately closing in negative territory.
Trade War Impact
The CSPI’s decline coincided with the implementation of new tariffs by the United States. These tariffs, which took effect Wednesday afternoon, impact nearly 60 countries, including Indonesia. While the base tariff was 10% on April 5, some countries face tariffs ranging from 11% to 50%. China experienced a notable increase of up to 104% following retaliatory measures.
reuters reported that economists warn U.S.consumers are likely to bear the brunt of the trade war through higher prices. A recent reuters/IPSOS poll indicated that nearly three-quarters of Americans anticipate rising prices for everyday goods in the next six months.
Currency and Bond Markets
The rupiah remained stable against the U.S. dollar, closing unchanged at Rp16,860/US$. Intraday,the currency had weakened,nearing Rp17,000/US$.
Yields on 10-year government bonds rose from 7.084% to 7.14%,indicating selling pressure in the bond market. Bond yields and prices move inversely, so rising yields reflect falling prices as investors reduce their SBN holdings.
US Market Surge
U.S. stock markets rallied following an proclamation to postpone some tariffs.The S&P 500 index jumped 9.52%, closing at 5,456.90, marking its largest daily increase since 2008. The dow Jones industrial Average rose 2,962.86 points, or 7.87%, closing at 40,608.45, its largest percentage increase as March 2020.
CNBC International reported that approximately 30 billion shares changed hands, making it the highest trading volume day in Wall Street history, according to records for the past 18 years.
According to a post on his Truth Social platform,the former President stated he authorized a 90-day pause and considerably reduced reciprocal rates to 10% during this period,effective instantly. He also indicated plans to raise tariffs on China to 125%.
According to Minister of Finance scott Besent, all countries, except China, will return to the basic tariff of 10%, down from a higher rate that previously shook the market, during the negotiation process. This postponement does not apply to certain sector tariffs,said Best.
External Factors Influencing Domestic Markets
Market sentiment is influenced by external factors, particularly the trade tensions between the U.S. and China. Additionally,the U.S. federal Reserve’s (The Fed) recent policy meeting minutes indicated a desire to slow the reduction of its balance sheet.
FOMC Minutes
the Fed’s minutes revealed a decision to slow the pace of balance sheet reduction, prompted by concerns about the uncertainty surrounding congressional action on the federal government’s debt ceiling.
According to the minutes, slowing or temporarily halting the balance sheet reduction would provide important protection against a rapid decline in central bank reserves after the debt ceiling issue is resolved.
At its March 18-19 policy meeting, the central bank announced it would reduce the maximum limit for U.S. government debt releases from $25 billion per month to $5 billion,while maintaining a $35 billion limit for mortgage bond releases.
This slowdown in quantitative tightening (QT) was widely anticipated. though, christopher waller, a Fed Governor, expressed skepticism about using securities ownership as a policy tool.
The Fed aims to manage liquidity in the financial system to normalize short-term interest rate volatility and maintain control over key federal interest rates. Though,the debt ceiling issue has clouded market signals.
Without the debt ceiling issue, the Fed would likely continue QT in full. Fed Chairman Jerome powell stated last month that market indications suggested “the amount of reserves is still abundant.”
The Congressional Budget Office projected last month that the government’s ability to manage cash without adding debt would likely run out in august or September.
China’s Economic Data
China is scheduled to release its consumer price index (CPI) data, which previously indicated deflation on both monthly and annual bases.
In February 2025, Chinese consumer prices fell 0.7% year-on-year, exceeding market expectations of a 0.5% decrease.This marked the first consumer deflation as January 2024. The CPI also fell 0.2% month-on-month.
Consensus estimates anticipate annual inflation for china, although deflation is still expected. This situation reflects the ongoing economic slowdown in China, which could negatively impact Indonesia as a trading partner.
U.S.Inflation Data
The United States is also set to release its CPI data,both annually and monthly.
in February 2025, the annual inflation rate in the U.S. slowed to 2.8%,below the January figure of 3% and market estimates of 2.9%. if inflation data continues to decline, it could strengthen the case for the Fed to cut benchmark interest rates, perhaps weakening the U.S. dollar and strengthening the rupiah.
government Debt
The Indonesian government has withdrawn Rp 250 trillion in new debt in the first three months of this year. This represents 40.6% of the targeted deficit financing.The budget deficit as of the end of March 2025 was Rp 104.2 trillion, or 0.45% of GDP, which is 16.9% of the target set in the 2025 State Budget.
finance Minister Sri Mulyani Indrawati stated that the government will continue to maintain the state budget, debt, and deficit in a prudent and obvious manner.
Budget financing as of March 31, 2025, consisted of Rp 270.4 trillion in debt withdrawals, reduced by Rp 20.4 trillion in non-debt financing.
The state revenue itself consists of the realization of tax revenue of Rp 400.1 trillion, or equivalent to 16.1% of the target of 2025 Rp 2,490.9 trillion and Non -Tax State Revenue (PNBP) of rp 115.9 trillion or. Anticipate the user’s journey and follow-up questions.