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25 Feb 2014
Flash: Indonesian Rupiah could trade stronger short term - JPMorgan
FXStreet (Bali) - JP Morgan is tactically neutral IDR, after the currency became the outlier outperformer in the past several weeks, the bank notes.
Key Quotes
"Granular flow data and our latest survey positioning show that bond underweights have continued to be cut. This is due to a continued improvement in the external accounts, with an unexpected narrowing by half of the quarterly current account deficit in 4Q to 2% of GDP as well as second consecutive trade surplus for December."
"Further underweight covering, or outright longs could push IDR stronger in the near-term, but we remain medium-term cautious, especially as we head into the second quarter.
"Anecdotal evidence suggests that the implementation of the unprocessed mineral ore ban has been unexpectedly strict. This will not be fully reflected in trade statistics until February numbers are released on April 1st, and will undo some of the recent improvement in trade balance prints."
"This critical trade balance print will be followed by parliamentary elections on 9 April, the first stage in a highly uncertain process to elect the next president (given that would-be front-runner Jokowi has yet to be formally declared his party’s candidate). Meanwhile there is a seasonal rise in oil and investment goods imports in May/June."
Key Quotes
"Granular flow data and our latest survey positioning show that bond underweights have continued to be cut. This is due to a continued improvement in the external accounts, with an unexpected narrowing by half of the quarterly current account deficit in 4Q to 2% of GDP as well as second consecutive trade surplus for December."
"Further underweight covering, or outright longs could push IDR stronger in the near-term, but we remain medium-term cautious, especially as we head into the second quarter.
"Anecdotal evidence suggests that the implementation of the unprocessed mineral ore ban has been unexpectedly strict. This will not be fully reflected in trade statistics until February numbers are released on April 1st, and will undo some of the recent improvement in trade balance prints."
"This critical trade balance print will be followed by parliamentary elections on 9 April, the first stage in a highly uncertain process to elect the next president (given that would-be front-runner Jokowi has yet to be formally declared his party’s candidate). Meanwhile there is a seasonal rise in oil and investment goods imports in May/June."