Global Market Updates
• Wall Street equities rallied Wednesday (Dec 6, 2023), DJI slid -0.19%, S&P 500 fell -0.39%, and Nasdaq closed down -0.56%.
• Stocks on Wednesday lost ground after an initial upswing, ending the day with a lower close. The market was dragged down by a decline in energy stocks due to crude prices plummeting over -4% to hit a five-month low.
• US Treasury 10-yr yields tumbled -1.0 bps to 4.18%, followed by shorter-termed UST 2-yr yield that fell 7.0 bps to 4.57%.
• 10-yr yields experienced an upward movement on Wednesday, bond yields saw further increases following upward revisions in Q3 productivity and downward revisions in Q3 unit labor costs, both considered dovish elements influencing Fed policy.
• US Q3 nonfarm productivity was adjusted higher to 5.2% from 4.7%, surpassing the anticipated 4.9%. Meanwhile, Q3 unit labor costs were revised down to -1.2% from the previously reported -0.8%, indicating a larger drop than the projected -0.9%.
• Global bond yields Wednesday moved lower; the German bund 10-yr yield fell -4.7 bps to 2.20%, the UK gilt 10-yr yield slipped -8.2 bps to 3.94%. The Japanese GB 10-yr yield closed down -3.10 bps to 0.64%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed an upward movement on Wednesday (Dec 6, 2023), as the 10-yr benchmark yield edged up +0.52 bps to 6.58%.
• IDR appreciated against the USD (USD/IDR fell -0.76% to 15,493) Wednesday. This surge in strength was notably influenced by the declining US employment data, mirroring a trend seen across most Asian currencies.
• The government highlighted that a total of US$7.9 billion in DHE SDA had been invested domestically across different financial instruments for a three-month period since Aug-23 until Oct-23. We anticipate these to be additional positive elements that will fortify foreign exchange reserves in 2023.
• In Wednesday’s Indo GB series trading, PBS003 and FR100 have become significant players in the bond market, displaying substantial trading volumes of IDR3.28tn and IDR2.78tn, respectively. Moreover, the most actively traded bonds were FR89 and FR91.
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.
Dislaimer On
