Global Market Updates
• Wall Street equities extended their gains on Friday (Dec 8, 2023), DJI surged +0.36%, S&P 500 went up +0.41%, and Nasdaq climbed +0.39%.
• Stocks on Friday held steady in the higher zone after an initial dip, buoyed by promising US economic reports hinting at an economic soft landing, and the Euro Stoxx 50 rally, reaching a 16-year high.
• US Treasury 10-yr yields surged by +9.0 bps to 4.23%, followed by a spike in shorter-termed UST 2-yr yields by +13 bps to 4.71%.
• 10-yr yields continued to rise as bond yields surged after the monthly US payroll report revealed higher-than-expected nonfarm payrolls of 199k in Nov-23, exceeding Oct-23’s 185k, and showed a surprising decline in the unemployment rate.
• The University of Michigan’s reports : US Dec-23 consumer sentiment index surged by +8.1 to reach 69.4, beating the expected 62.0. The 1-year inflation outlook Dec-23 dropped to 3.1% from Nov-23’s 4.5%, and the 5-10 year inflation expectations for Dec-23 declined to 2.8% from Nov-23’s to 3.2%.
• In Asia, Japan's Q3 GDP was unexpectedly revised lower to -2.9%YoY from -2.1%, falling short of expectations of -2.0%. Meanwhile, Japan’s Oct-23 labor cash earnings increased by +1.55%YoY.
• Global bond yields moved higher on Friday; the German bund 10-yr yield rose +8.5 bps to 2.27%, the UK gilt 10-yr yield increased +7.4 bps to 4.04%. The Japanese GB 10-yr yield grew +0.80 bps to 0.77%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Friday (Dec 8, 2023), as the 10-yr benchmark yield rose +1.22 bps to 6.58%.
• IDR strengthened against the USD (USD/IDR fell by -0.03% to 15,510) on Friday. This rebound followed a previous weakening of the IDR, attributed to BI’s release of increased Indonesia foreign reserves and higher US unemployment claims data.
• Indonesia's consumer confidence for Nov-23 declined to 123.6 from the previous month's 124.3, however, it indicates persistent strong consumer confidence, bolstered by positive readings in both the Economic Conditions Index and Consumer Expectations Index.
• Friday's SBN-backed assets SRBI auction saw reduced interest, resulting in higher bidding rates and IDR6.2tn awarded bids, down from the earlier IDR7.4tn following the Fed's softened stance.
• FR98 and FR101 were notably significant in Friday’s Indo GB series trading, recording substantial trading volumes of IDR2.70tn and IDR1.26tn, respectively. Additionally, FR98 and FR89 as the bonds with the highest trading activity.
Market Forecast
• Given the recent developments that unfolded within the global and domestic markets, we expect the 10-yr Indo GB yield to move within the range of 6.50-6.70% for today.
• Attractive Indo GB series to be traded today : FR0040, FR0081, FR0096, FR0100.
Disclaimer On
