Global Market Updates
• Wall Street equities exhibited a mixed performance on Thursday’s close (Jan 11, 2024), DJI rose by +0.04%, S&P 500 closed down by -0.07%, and Nasdaq closed up by +0.00%.
• Stocks closed with mixed results as disappointing news of US consumer prices had a weighty impact on the overall market on Thursday. The December CPI exceeded expectations, dampening prospects for potential rate cuts.
• US Treasury 10-yr yields fell by -6 bps, reaching 3.98%, while the shorter-termed UST 2-yr yields tumbled by -11 bps at 4.26%.
The 10-yr yields tumbled on Thursday after the latest inflation report sparked unexpected surge, pushing expectations for an interest rate cut from the Fed further out.
• US December CPI rose to +3.4% YoY, beating expectations of +3.2% YoY. December core CPI eased to +3.9% YoY, below Nov's +4.0% YoY, but exceeded expectations of +3.8% YoY.
• Unexpectedly, US weekly initial unemployment claims dropped by -1k to reach 202,000, indicating a more robust labor market compared to the expected increase to 210,000.
• The tension in the Red Sea is putting pressure on global trade, with global trade recorded to have decreased by 1.3% from November to December 2023. Attacks on commercial ships in the Red Sea by Houthi militias in Yemen have led to a decline in cargo volumes that could disrupt the global supply chain.
• Global bond yields on Thursday were mixed; the German bund 10-yr yield rose by +2.25 bps to 2.23%, the UK gilt 10-yr yield inched up by +2.3 bps to 3.84%. The Japanese GB 10-yr yield rose by +1.70 at 0.60%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed lower on Thursday (Jan 11, 2024), with the 10-yr benchmark yield rose +0.72 bps to 6.71%.
• The IDR strengthened against the USD (USD/IDR fell by -0.13% to 15,549) at Thursday’s close. IDR appreciated amid market speculations as US economic data on inflation and unemployment is set to be released today.
• The SUVBI auction held on Wednesday garnered significant investor interest, with the winning bid amounting to USD90mn, a notable increased from the previous USD25mn.
• On Thursday’s Indo GB series trading, FR87 and FR100 were notable in the bond market, experiencing high trade volumes of IDR2.13tn and IDR1.55tn, respectively. Moreover, PBS36 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 : FR0081, FR0091, FR0096, FR0100.
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