Global Market Updates
• Wall Street was closed on Monday, January 15, 2024 in observance of Martin Luther King Day.
• The markets are discounting the chances for a -25 bp rate cut at 7% at the next FOMC meeting on Jan 30-31 and 82% for that same -25 bp rate cut for the following meeting on March 19-20.
• Investors are anticipating US December retail sales data scheduled for release on Wednesday. The results have the potential to raise concerns about economic growth and the possibility of a slowdown in consumer spending.
• From Asia, Japan producers prices climb 0.3% MoM to 119.9 in December, beating expectations of remaining unchanged from November at 119.6.
• Global bond yields on Monday showed a mixed performance; the German bund 10-yr yield rose by +0.3 bps to 2.20%, the UK gilt 10-yr yield rose by +0.4 bps to 3.80%. The Japanese GB 10-yr yield fell by -3.70 at 0.57%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Monday (Jan 15, 2024), with the 10-yr benchmark yield fell -0.55 bps to 6.64%.
• The IDR continue to weakened against the USD (USD/IDR rose by +0.03% to 15,555) at Monday’s close. The IDR depreciated after BI announced Indonesia's foreign debt, coupled with a 0.04% rise in the DXY to 102.45.
• Indonesia's trade balance surplus continued to grow in Dec-23, reaching USD3.31bn, up from the Nov-23 surplus of USD2.41bn. This release signifies a total trade balance for Jan-Dec 2023 of USD36.93bn, down from the same period in 2022, which recorded USD54.46bn.
• Indonesia’s foreign debt for Nov-23 increased by 2.0% YoY to USD400.9bn, exceeding the Oct-23 position of USD394.4bn. The uptick is partly due to the government issuing USD2bn in new global sukuk debt. However, the foreign debt-to-GDP ratio remained manageable at 29.3%.
• On Monday’s Indo GB series trading, FR81 and FR101 were notable in the bond market, experiencing high trade volumes of IDR1.24tn and IDR744bn, respectively. Moreover, FR77 and PBS003 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 FR101.
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