Global Market Updates
• Wall Street equities experienced modest losses on Friday’s close (Feb 16, 2024). DJI fell by -0.37%, followed by S&P 500 slid by -0.48%, and Nasdaq closed down by -0.82%.
• Stocks felt pressure after Friday's robust January producer price report released, reinforcing signs of persistent inflation and fueling speculation that the Fed won't rush to cut interest rates. However, a rebound occurred as the University of Michigan's US February consumer sentiment index surged +0.6 to reach a 2.5-year high of 79.6.
• US Treasury 10-yr yields rose by +6.0 bps to 4.30%, while 2-yr yields grew by +8.0 bps to 4.64% on Friday. The Treasury yields climbed following hawkish remarks from the Fed on inflation, causing a drop in T-yield prices.
• US Jan PPI for final demand eased to +0.9% YoY from Dec's +1.0%, beating expectations of +0.6% YoY. Jan PPI ex-food and energy unexpectedly increased to +2.0% YoY from Dec's +1.7%.
• US Jan housing starts unexpectedly fell by -14.8% in January to 1.331mn, below the expected 1.460mn. Building permits, also unexpectedly dropped by -1.5% to 1.470mn, missing the expected increase to 1.512mn.
• The US Jan import price index ex-petroleum increased by +0.6% MoM, surpassing expectations of no change and marking the most substantial increase in 13 months.
• UK’s GDP shrank by -0.3% in the 4Q-23, surpassing estimated decline of -0.1%. This comes after a -0.1% contraction in the preceding three months, technically placing the UK in a mild recession in 2023.
• Global bond yields moved higher on Friday, except in Japan; the German bund 10-yr yield rose by +4.3 bps to 2.40%, the UK gilt 10-yr yield increased by +5.4 bps to 4.10%, while, The Japanese GB 10-yr yield slid by -1.30 at 0.74%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Friday (Feb 16, 2024), with the 10-yr benchmark yield rose +0.52 bps to 6.63%.
• The IDR depreciated against the USD (USD/IDR rose by +0.06% to 15,623) at Friday’s close. During the election euphoria, the Rupiah weakened at the close as investors stayed vigilant, digesting possible sentiments ahead.
• As of February 15, 2024 Ytd, BI reported foreign fund flows showing a net sell of IDR 0.68tn in the SBN market, a net buy of IDR 15.41tn in the stock market, and a net buy of IDR 29.76tn in the SRBI.
• The government will conduct an SBSN auction on Tuesday, February 20, featuring a series of SPNS 05082024, SPNS 18112024, PBS032, PBS030, PBSG001, PBS004, and PBS038 with an indicative target of IDR12tn.
• On Friday’s Indo-GB series trading, FR100 and FR101 were notable in the bond market, experiencing high trade volumes of IDR4.17tn and IDR2.79tn, respectively. Moreover, FR102, FR81 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 : FR0087, FR0091, FR0096, FR0100 FR101.
Disclaimer On
