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CPI Trending Lower

INDONESIA
  • Indonesia CPI came in a 2.13% versus survey of 2.37% and last month's print of 2.51%.
  • Having peaked in Q3 2022, inflation appeared to be in control in Indonesia until 2Q 2024.
  • 2Q 2024 saw an unexpected revival in inflation, creating concerns for investors.
  • At a time where fiscal prudence was under the microscope given the change in government, the rise in inflation again was concerning investors.
  • The central bank raised rates in April in the face of this, at a time when developed market central banks remained on hold.
  • Today’s number likely gives some breathing space to the Central Bank ahead of any likely cut in rates from the Federal Reserve.
  • Following overnight moves in global bond markets, local markets were already trending lower in yield.
  • Today’s CPI print underpinned that move lower in yield, paving the way for a potential move by the Central Bank following clarity from the Federal Reserve.

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