11 Juli 2024
Fixed Income Report July 11, 2024
Global Market Updates
• Wall Street equities finished higher on July 10, with the DJIA surged by +1.09%, the S&P 500 close up by +1.02% and the Nasdaq advanced by +1.18%.
• Stock indexes soared Wednesday, with the S&P 500 and Nasdaq setting new all-time highs, and the Dow reaching a 7-week high. The market was buoyed by strong performance in chip stocks, which lifted the technology sector and broader market, following TSMC's report of better-than-expected Q2 sales.
• The 10-yr UST yields dropped by -2.0 bps to 4.28%, with the 2-yr yields unchanged at 4.62%. T-notes advanced due to robust demand for the Treasury’s USD39 billion auction of reopened 10-year T-notes, despite the S&P 500's record high on Wednesday reduced safe-haven demand for T-notes.
• The US MBA mortgage applications declined by -0.2% in the week ending July 5. The purchase mortgage sub-index increased by +1.0%, whereas the refinancing mortgage sub-index dropped by -2.2%. The average 30-yr fixed mortgage rate fell by -3 bps to 7.00%.
• In Asia, China's annual inflation rate fell to 0.2% YoY in June 2024 from 0.3% YoY in the preceding two months, underperforming market predictions of 0.4%. It was the fifth month in a row of consumer inflation, but the lowest rate since March, pointing to a sluggish economic recovery.
• Global bond yields moved lower on Wednesday: the 10-yr German bund yield fell by -4.7 bps to 2.53%, the 10-yr UK gilt yield slipped by -3.3 bps to 4.13%, and the Japanese 10-yr JGB yield edged down by -0.7 bps to 1.09%.
Domestic Market Updates
• The Indonesian benchmark series of LCY government bond moved higher on July 10, with the 10-yr benchmark yield fell by -0.15 bps to 7.03%, while the 2-yr yield slid by -1.33 bps to 6.67%.
• The IDR appreciated against the USD on Wednesday (USD/IDR -0.06% to 16,240). The IDR saw slight gains alongside the dollar index, following Fed Chair Powell's comments on inflation progress towards targets, ahead of the upcoming CPI data release on Thursday.
• The SRBI auction saw a surge in demand on Wednesday, with total bids reaching IDR32.1 trillion, up from IDR25.9 trillion in the previous auction. Bank Indonesia awarded IDR17.9 trillion in winning bids, slightly lower than the previous IDR18.6 trillion, with winning rates easing to 7.30-7.49%.
• In Wednesday's Indo-GB series trading, FR0100 and PBS032 garnered notable interest in outright transactions, with the highest trade volumes of IDR3.21tn and IDR1.81tn, respectively. Additionally, FR0100, FR097, and PBS036 were the most actively traded series. 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 6.85-7.15% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0084, FR0101, FR0087 , FR0100, FR0098.
FR81
FR84
FR101
FR87
FR100
FR98
