Markets were driven by Liberation Day, while data releases showed US mixed pictures: stronger-than-expected NFP (Mar: +117k m-m, cons: +135k m-m, prev: +228k m-m) and below consensus ISM Mfg. PMI (Mar: 49, cons: 49.5, prev: 50.3). Recently, Trump threatened additional 50% tariff for China, totaling to 104%, if China did not hold back their tariff attack. Meanwhile, China said the threat to be “a mistake on top of a mistake”. From domestic, the govt. would visit US by 17 Apr at the latest, represented by Coordinating Minister of Economic Affairs and Foreign Minister. Indonesia, along with other ASEAN members, prefer negotiation over retaliation.

From the bond market, FR 81, 40, 84, and 72 are currently the cheapest based on our yield curve model. Last national business day, the dollar index was closed at 104.34 (-0.2%). Rupiah was appreciated by 0.2% at USDIDR at 16,562. The UST yield was up by +0.8bps to 4.36% and 10yr INDOGBR was down by -12.2bps to 7.00% – the spread between the two was at 264bps.

Economy: US-China trade war escalated

Following last week’s Liberation Day, 10% flat tariff was effective on 5 Apr, and reciprocal tariff would be effective on 9 Apr. While Trump imposed China with 34% tariff, China hit back using the very same rate. Trump then threatened China with additional 50% tariff, effective on 9 Apr, if China did not hold back their tariff attack on 8 Apr. Source: Bloomberg

Economy: Indonesia’s govt. was gearing up to negotiate Trump’s tariffs

The 32% tariff implemented by Trump’s administration would take effect on 9 Apr. Indonesia’s govt. then set a deadline of 17 Apr to negotiate this issue with US. Despite facing significant threats, they opted for diplomatic negotiations rather than retaliation. Key policies to be negotiated with US were as follows: deregulating Non-Tariff Measures (NTMs) by relaxing Domestic Component Levels (TKDN) in ICT sector for companies like GE, Apple, Oracle, & Microsoft, while assessing existing restrictions; increasing imports and investments from US, particularly for Pertamina’s oil and gas purchases; and implementing fiscal & non-fiscal incentives e.g. reducing import duties, VAT, & income tax. Source: Kontan

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Research Division

PT Trimegah Sekuritas Indonesia, Tbk.