Global Market Updates
• Wall Street equities had a minor losses at Tuesday’s close (Jan 16, 2024), DJI fell by -0.62%, S&P 500 edged down by -0.37%, and Nasdaq closed down by -0.19%.
• Stocks experienced a modest downturn, with the Dow Jones Industrial falling to a 3.5-week low. The declined was attributed to mixed earning results and some negative corporate news.
• US Treasury 10-yr yields surged by +10 bps, reaching 4.07%, while the shorter-termed UST 2-yr yields climbed by +8 bps at 4.22%.
• On Tuesday, Treasury yields rose following Fed's Waller remarks which tempered speculation of imminent Fed rate cuts, emphasizing the need for a methodical and careful approach.
• US January Empire Manufacturing Survey's general business conditions index unexpectedly plummeted -29.2 to -43.7, weaker than expectations of an increase to -5.0.
• The ECB's Eurozone 1-year inflation expectations in Nov-23 eased to +3.2% from October’s +4.0%. Additionally, the 3-year inflation expectations for Nov-23 declined to +2.2% from October's +2.5%.
• From Asia, Japan's Dec-23 PPI rose +0.3% MoM, beating expectations of no change MoM and -0.3% YoY.
• Global bond yields on Tuesday showed a mixed performance; the German bund 10-yr yield rose by +2.5 bps to 2.25%, the UK gilt 10-yr yield fell by -0.1 bps to 3.79%. The Japanese GB 10-yr yield grew by +3.00 at 0.60%.
Domestic Market Updates
• Indonesian benchmark series of LCY government bonds closed higher on Tuesday (Jan 16, 2024), with the 10-yr benchmark yield fell -0.04 bps to 6.66%.
• The IDR depreciated against the USD (USD/IDR rose by +0.23% to 15,591) at Tuesday’s close. IDR weakened after BPS reported lower trade balance, with market awaiting BI’s interest rate announcement at today's RDG meeting.
• Investors responded positively to Tuesday’s SUN auction, securing winning bids amounting to IDR24tn out of total bid of IDR67.56tn. FR101 securing the highest awarded bid of IDR8.85tn from the total bid of IDR23.59tn.
• Investors welcomed Tuesday’s SVBI auction, securing USD284mn in awarded bids out of a total bid of USD371mn. The bidding rates showed a wider range compared to the previous auction, where USD147mn was awarded from a USD243mn bid total.
• BI will announce the results of the January 2024 RDG today. We anticipate that BI will likely maintain the interest rate at 6% due to ongoing inflationary pressures from the US, causing uncertainty about the future direction of interest rates.
• On Tuesday’s Indo GB series trading, FR100 and FR101 were notable in the bond market, experiencing high trade volumes of IDR11.71tn and IDR6.21tn, respectively. Moreover, FR77 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 FR101.
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