USD/IDR Gaps Lower As Indonesian Markets Return, CPI Figures Due Later

Spot USD/IDR has returned from a two day break (Thur/Fri) last week to gap lower in the first part of trade. The pair is back sub the 14890 level, after closing last Wed just under 15000. Part of this is catch up with lower USD levels more broadly since the last spot close. The 1 month NDF is around closing levels from the end of last week, last near14885.

• These moves put spot back sub the 50-day MA (which is near 14950), while mid-May lows come in just above the 14800 level.
• Higher oil prices will be helping IDR at the margins, with palm oil prices recovering some ground in the second half of last week. Onshore equities are +0.30% higher at this stage.
• Earlier we had the manufacturing PMI for May print at 50.3, versus 52.7 prior. The detail wasn't great with new orders contracting and foreign orders falling for the 12th straight month.
• Later on, we have May CPI on tap, the headline y/y is expected to ease to 4.21% from 4.33% y/y, while core is projected at 2.81% y/y, from 2.83%. Any downside surprises may help build momentum around BI rate cuts later this year.