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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
IDR
Indonesian markets have returned from a 5-day break. The early impetus to spot USD/IDR is to the topside. After closing last Tuesday at 14845 we have pushed to 14920/25 in the first part of trade, around 0.50% weaker in IDR terms. This is broadly in line with USD/IDR 1 month NDF levels, which have held above 14900 for the period that Indonesian markets have been shut (last 14925 for the 1 month NDF).
- It also extends the USD/IDR recovery that has been in train since mid-April. We have the 20-day EM around 14960, while round figure resistance may be evident at 15000 level if we extend higher, see the chart below.
- In terms of drivers of this weaker IDR trend, most other USD/Asia pairs are =higher in the period Indonesian markets have been shut, so USD/IDR will also be seeing some spill over from that. Only PHP and INR are up, but part of that likely reflects some pull back in energy prices, which is unlikely to benefit IDR. Palm oil prices are mostly lower in the past week or so.
- Local FX will welcome the pull back in both nominal and real US yields over the past week, although fresh weakness in global equities is likely providing some offset.
- The data calendar is empty next week when the manufacturing PMI and CPI prints for April are due (2nd of May, Tuesday).
Fig 1: USD/IDR Extends Recovery As Onshore Markets Return
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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