Central Bank Meetings Take Focus With USD/IDR Touching Two-Month Highs

Spot USD/IDR last +28 figs at IDR15,010 after lodging new multi-week highs ahead of much anticipated central bank meetings. A break above Jul 22 high of IDR15,038 is needed to shift focus to May 5, 2020 high of IDR15,138. Bears look for a retreat towards Sep 12 low of IDR14,818.

• USD/IDR 1-month NDF last -13 figs at IDR15,041. Downside focus falls on the 100-DMA at IDR14,824. Bulls look for a jump towards Jul 21 high of IDR15,133.
• Foreign investors bought a net $16.1mn in local equities Tuesday, with the Jakarta Comp little changed come the end of the day. The index has turned heavy today and last trades ~0.5% lower on the day.
• Palm oil futures have firmed in Kuala Lumpur trade, the contract for December delivery last deals +MYR64/MT. The aggregate Bloomberg Commodity Index has also edged higher.
• Several Indonesian ministers (including FinMin Indrawati) will speak at Indonesia Petroleum Association's event today, before focus turns to Thursday's Bank Indonesia meeting. The Board of Governors is expected to raise the 7-Day Reverse Repo Rate by 25bp, with the increase in subsidised fuel prices set to boost inflation.
• Indonesia's central bank was one of the last in emerging Asia to join the global wave of tightening and remains way behind the aggressive Fed. OIS prices ~80bp of tightening for today's FOMC meeting, which will further widen policy divergence with Indonesia.