Global Market Updates
• Wall Street equities continued their modest ascent on Monday (Dec 11, 2023), DJI surged +0.43%, S&P 500 went up +0.39%, and Nasdaq closed up +0.85%.
• Stocks gained support Monday amid expectations of ongoing U.S. consumer price easing. Chip stocks' strength on Monday lifted the tech sector and the overall market, driven by Bloomberg Intelligence's forecast of robust fundamental growth in 2024, fueled by confirmed market bottoms and generative AI's secular tailwinds.
• US Treasury 10-yr yields rose by +0.76 bps to reach 4.23%, while the shorter-termed UST 2-yr yields held steady from the previous day at 4.71%.
• The bond yields on Monday exhibited a varied pattern, initially dropping from the previous highs due to strong demand observed at the Treasury's USD37bn auction of 10-year T-notes, and ended with a slight increase.
• Investors will closely monitor the central bank meetings scheduled for this week, particularly those of the Fed, ECB, and BOE. The focus is on determining whether policymakers are in favor of pausing interest rate hikes and when they might transition to more accommodative measure.
• China's Nov-23 CPI dropped by -0.5% YoY, falling below the anticipated -0.2% YoY and marking the most significant decline in three years. Furthermore, China's Nov-23 PPI declined by -3.0% YoY, below the expected -2.8% YoY.
• Global bond yield on Monday are mixed; the German bund 10-yr yield fell -0.6 bps to 2.27%, the UK gilt 10-yr yield climbed +3.6 bps to 4.07%. The Japanese GB 10-yr yield slid -0.10 bps to 0.77%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Monday (Dec 11, 2023), as the 10-yr benchmark yield rose +4.05 bps to 6.62%.
• IDR weakened against the USD (USD/IDR rose by +0.68% to 15,615) on Monday. The depreciation of the IDR is happening while market participants adopt a wait-and-see stance, anticipating the release of US inflation data and the Fed's decision on its benchmark interest rates this week.
• Indonesia and South Korea are set to execute non-US dollar transactions for trade, investment, and financial activities in the upcoming year of 2024. The LCT framework will ease cross-border payments within trade areas, reducing exchange rate risks and costs for businesses and users.
• The Government will hold SBSN auction today with a total indicative target at IDR9tn. SPN03240313 and SPN12241212 will be featured as a new issuance.
• During Monday’s Indo GB series trading, FR72 and FR101 emerged as significant players in the bond market, registering substantial trading volumes of IDR874.7bn and IDR844.5bn, respectively. Additionally, PBS36 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.
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