US was largely driven by the highly anticipated Fed's speech, that some hoped could energize the market on any signal of QE3, but instead gave a negative color to overall sentiment. Bernanke acknowledge the slower growth in US, and stated that the Fed will remain “accommodative”, but market still isn't comforted by his statements. Meanwhile Asia still trade sideways. Yesterday's slight gain was influenced by comments from ECB regarding more Greek bond buying, but Asian inflation worries remains.
Even Indonesia, which was generally “safe” from inflation worries during 2Q11, now may be facing more inflation risks in the upcoming months. As we know, the festive season is coming in the 3Q11, as well as (tentative) fuel subsidy phase out, and the end of harvest season. All of this factors are leading to accelerating inflation in the next 6 months. Moreover, 2 surveys of the consumer confidence index released yesterday showed a 1.6 points drop to 105.3 points, mirroring a mixed sentiment regarding concern on inflation.
Bank Indonesia is due to maintain its benchmark reference rate at 6.75% tomorrow afternoon, as we believe, for now, inflation is still under control and stronger currency has helped contain rising prices.
Rabu, 08 Juni 2011
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