Global Market Updates
• Stocks posted moderate increases on Thursday (Dec 7, 2023), DJI rose +0.17%, S&P 500 climbed +0.80%, and Nasdaq closed up +1.48%.
• Stocks upheld their positive performance following the release of the weekly US jobless claims, which met anticipated levels. However, the decline in continuing claims surpassed expectations, signaling that the rate of layoffs isn't picking up.
• US Treasury 10-yr yields rose +2.0 bps to 4.14%, followed by shorter-termed UST 2-yr yield that fell -2.0 bps to 4.58%.
• 10-yr yields continued their ascent as US weekly initial jobless claims rose by 1,000 to 220,000, meeting expectations. Meanwhile, weekly continuing claims fell by 64,000 to 1.86mn, signaling a labor market strength stronger than the expected 1.91mn.
• US Oct-23 wholesale trade sales unexpectedly dropped by -1.3%MoM significantly below the expected +1.0%MoM and marking the largest decline in 7 months. Additionally US Oct-23 consumer credit increased by +USD5.13bn, falling short of the anticipated +USD8.50bn.
• From the Asian markets, China’s recently released imports for Nov-23 unexpectedly dropped by 0.6%YoY to USD 223.54 bn. This outcome missed market estimates, which had projected a 3.3% increase, reversing the 3.0% growth from the previous month.
• Global bond yields Thursday moved higher; the German bund 10-yr yield fell -0.9 bps to 2.19%, the UK gilt 10-yr yield grew +2.5 bps to 3.96%. The Japanese GB 10-yr yield closed up +11.90 bps to 0.76%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Thursday (Dec 7, 2023), as the 10-yr benchmark yield fell -0.76 bps to 6.57%.
• IDR depreciated against the USD (USD/IDR rose +0.14% to 15,515) on Thursday. The depreciation of the IDR coincided with a downgrade in China's credit rating, sparking concerns among investors. The slowdown in China's economy has had adverse effects on Indonesia's economic activities.
• During Nov-23, Indonesia foreign exchange reserves surged by USD5bn, reaching USD138bn. This uptick in reserves was propelled by the issuance of global government bonds and the repayment of government foreign loans, potentially contributing to a strengthened position for the rupiah.
• In Thursday’s Indo GB series trading, FR101 and PBS36 have garnered notable significance within the bond market, displaying substantial trading volumes of IDR2.00tn and IDR0.80tn, respectively. Moving forward, FR89 and FR87 remained at the forefront as the most actively traded bonds.
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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