Global Market Updates
• Wall Street equities settled mixed on Friday’s close (Feb 09, 2024). DJI slid by -0.14%, S&P 500 closed up by +0.57%, and Nasdaq closed up by +1.25%.
• Stocks closed with a mixed gains, with the S&P reaching a new record high and closing above 5,000 index point for the first time. Solid Q4 corporate earnings results buoyed market sentiment, propelling stocks higher, with earnings season almost two-thirds complete, approximately 80% of S&P 500 companies reporting results have exceeded estimates, surpassing the 10-year average of 74%, as per Bloomberg Intelligence.
• US Treasury 10-yr yields rose by +2 bps to 4.17%, followed by 2-yr yields edged up +2 bps to 4.48% on Friday. The Treasury note yield moved flat as investors analyzed annual CPI revisions kept Q4 US core prices unchanged at 3.3% YoY, indicating slower-than-reported inflation for December.
• US Dec trade deficit expanded to -USD62.2bn, exceeding expectations of -USD62.0bn. This larger deficit is anticipated to have a negative impact on Q4 GDP.
• US Dec consumer credit increased by +USD1.561bn, falling short of expectations of +USD16.000bn and marking the smallest increase in four months.
• US weekly initial unemployment claims beat expectations, falling to 218,000 (-9,000), and continuing claims dropped to 1.8mmn (-23,000), both signaling a stronger labor market.
• China's Jan CPI dropped -0.8% YoY, below the expected -0.5%, marking the steepest decline in 14 years. Jan PPI fell 2.5% YoY, slightly better than the anticipated -2.6%.
• Global bond yields were mixed on Wednesday; the German bund 10-yr yield increased by +2.8 bps to 2.38%, the UK gilt 10-yr yield grew by +3.50 bps to 4.08%, and The Japanese GB 10-yr yield closed down by -0.50 at 0.72%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Wednesday (Feb 07, 2024), with the 10-yr benchmark yield fell -0.94 bps to 6.60%.
• The IDR appreciated against the USD (USD/IDR fell by -0.60% to 15,635) at Wednesday’s close. The Rupiah closed stronger ahead of the extended holiday, and we anticipate that The January US inflation data, set to be released tomorrow, will potentially influence the IDR's direction against the USD in the coming week.
• Investors welcomed Wednesday’s SUVBI auction, securing USD110mn in awarded bids with a 1.0x bid-to-cover ratio. The bidding rates showed a wider range compared to the previous auction, where USD472mn was awarded from a USD512mn bid total.
• As of February 7, 2024, non-residents made net purchases of IDR0.25tn in government bonds, IDR11.64tn in the stock market, and IDR31.52tn in State Sharia Securities (SRBI).
• On Wednesday’s Indo-GB series trading, FR100 and FR101 were notable in the bond market, experiencing high trade volumes of IDR2.90tn and IDR2.75tn, respectively. Moreover, FR102 and FR91 exhibited significant trading frequency.
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 6.55-6.70% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0091, FR0096, FR0100 FR101.
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