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Weekly Insight

Under Pressure

20 October 2025
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Under Pressure

Global Markets

The Federal Reserve: Market expectations have strengthened for two additional rate cuts in 2025—a likely 25 bps cut in October and another in December—following dovish remarks from Chair Jerome Powell and Governor Christopher Waller, who both emphasized the need for a gradual easing cycle. From Europe, Government bond yields declined amid improved political sentiment in France (postponement of pension reforms) and more contained inflation expectations. Asia China-US Relations: Trade tensions have resurfaced. The planned Trump–Xi Jinping meeting later this month will focus on the cumulative 145% tariffs imposed on Chinese goods, which markets hope could be moderated.


Indonesian Markets

Domestically, Indonesia’s 3Q25 GDP growth is expected to remain solid around 4.8–4.9% YoY, supported by household consumption and nickel exports. Bank Indonesia (BI) Policy Rate currently stands at 4.75%, following five consecutive cuts since early 2025 (from 5.50%). Markets are split between expectations of a 25 bps cut to 4.50% or a hold at 4.75% in this week’s Board of Governors Meeting. Rupiah slightly weakened to IDR 16,590/USD, in line with global USD strength and foreign outflows.


Weekly Highlight on Economic Indicators


Our Take:

JCI fell sharply below 8,000 last week, driven by foreign net outflows of IDR 3 trillion, rising geopolitical risk in Gaza, and concerns over large conglomerate stocks. From bond market, The 10 year benchmark yield fell significantly to 5.96% (from 6.12% last week), its lowest level since January 2021 due to abundant domestic liquidity and BI’s easing bias helped keep yields anchored.

The recommendation for investment to our investors (in order):
Fixed Income Fund > Equity Fund > Balanced Fund > Money Market Fund.


Author : KBVAM Investment Team

Source: Bloomberg, Infovesta, Trading Economics

DISCLAIMER :
INVESTMENT THROUGH MUTUAL FUNDS CONTAINS RISKS. PROSPECTIVE INVESTORS MUST READ AND UNDERSTAND THE PROSPECTUS BEFORE DECIDING TO INVEST THROUGH MUTUAL FUNDS. PAST PERFORMANCE DOES NOT REFLECT FUTURE PERFORMANCE.

This document was prepared based on information from reliable sources by PT KB Valbury Asset Management. PT KB Valbury Asset Management does not guarantee the accuracy, adequacy or completeness of the information and materials provided. PT KB Valbury Asset Management Indonesia is not responsible for any legal and financial consequences arising, whether against or suffered by any person or party and in any way deemed to be a result of actions taken on the basis of all or part of this document.