Highlights Analysis on Indonesia starts below. The U.S. dollar is a counter-cyclical currency – it exhibits a negative correlation with the global business cycle. Ongoing weakness in the global economy – which is…
Chart II-1Indonesian Exports: Double-Digit Contraction Foreign investors have been rushing into Indonesian financial markets on expectations of the Fed cutting rates. As a result, Indonesian financial markets have been more…
Highlights In Indonesia, investors are ignoring the weakness in global growth, which is an important driver of the country’s financial markets. The Indonesian currency, equities and local currency bonds all remain vulnerable. We…
Indonesian financial assets have benefited from the Federal Reserve’s dovish turn and corresponding fall in U.S. bond yields (Chart I-1, top panel). Moreover, the market is cheering President Joko Widodo’s lead in the…
Stocks are overvalued, overexposed to the financial sector, and vulnerable if global growth does not stabilize. The most important trend since the near collapse of Indonesia in the late 1990s has been the stabilization of the…
Highlights So what? EM elections bring opportunities as well as risks. Why? Emerging market equities will benefit as long as China’s stimulus does not fizzle. Modi is on track to win India’s election –…
Highlights Analysis on Indonesia is available below. EM financial markets have diverged from the global growth indicators they have historically correlated with. This raises doubts about the sustainability of this rally. In China,…
Indonesian stocks have outperformed their emerging market peers significantly in the past few months as the Federal Reserve has turned dovish and U.S. rate expectations have declined. Although U.S. bond yields do strongly and inversely…
The Indonesian currency has reached a two- decade low, and equities and bonds have sold off considerably. Is it time to turn positive on the nation's financial markets? Our bias remains that this selloff is not over and stocks, bonds…