Global Market Updates
• Wall Street equities closed with a mixed performance on Tuesday’s close (Jan 9, 2024), DJI fell by -0.42%, S&P 500 inched down by -0.15%, and Nasdaq closed up by +0.09%.
• Stocks closed with mixed settlements, as reduced expectations for a Fed rate cut in March impacted markets. Swap markets now show expectations of a -25 basis point cut on the March FOMC meeting dropped from 100% to 67%.
• US Treasury 10-yr yields edged up by +1 bps, settling at 4.02% as investors assessed the state of the economy ahead of key inflation data due later this week. The shorter-termed UST 2-yr yields was unchanged at 4.36%.
• Today's US Nov-23 trade deficit unexpectedly narrowed to -USD63.2bn from Oct-23 USD64.5bn, surpassing the expected -USD64.9bn. This development bodes well for Q4 GDP.
• The Eurozone's Nov-23 unemployment rate unexpectedly fell to a record-matching low of 6.4%, beating the anticipated 6.5%, signaling a strong labor market.
• Japan’s Nov-23 household spending fell by -2.9% YoY, below the expected -2.3%. Tokyo, Dec-23 CPI dropped to +2.4% YoY from Nov-23 +2.7%, surpassing the anticipated +2.5%. Excluding fresh food and energy, Dec-23 CPI eased to +3.5% YoY, meeting expectations.
• Global bond yields on Tuesday moved lower; the German bund 10-yr yield rose by +5.2 bps to 2.18%, the UK gilt 10-yr yield inched up by +1.0 bps to 3.78%. The Japanese GB 10-yr yield fell by -1.90 at 0.59%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Tuesday (Jan 9, 2024), with the 10-yr benchmark yield rose +0.02 bps to 6.70%.
• The IDR strengthened against the USD (USD/IDR fell by +0.05% to 15,520) at Tuesday’s close, marking a rebounds amidst market speculations surrounding the release of the US inflation data or the main CPI on Thursday.
• The BI survey in Dec-23 recorded Indonesia’s Consumer Confidence Index (IKK) inching up to 123.8 from 123.6 in the previous month, propelled by the strengthening of the Current Economic Conditions Index (IKE). This indicators of consumption growth suggest a strong performance in the domestic economy.
• The SBSN auction gained positive response yesterday, attracting a total incoming bid nominal of IDR28.3tn vs IDR11.9tn previously. PBS032 secured the highest awarded amount of IDR3.3tn out of the total awarded amount sum of IDR12.0tn.
• On Tuesday’s Indo GB series trading, FR87 and FR91 were notable in the bond market, experiencing high trade volumes of IDR2.68tn and IDR2.62tn, respectively. Moreover, FR91 and FR102 also sustained substantial 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 6.55-6.75% for today.
• Attractive Indo GB series to be traded today : FR0077, FR0081, FR0096, FR0100.
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