Company Update

12 Juni 2024

Fixed Income Report June 12, 2024

Global Market Updates

• Wall Street equities ended mixed on June 11, with the DJI dropped by -0.31%, the S&P 500 grew by +0.27%, and the Nasdaq closed up by +0.88%.

• Stocks gained on Tuesday, with the S&P 500 and Nasdaq reaching new records, while the Dow fell to a 1-week low. This occurred ahead of the Fed's interest rate decision on Wednesday afternoon and a key inflation report before the market opens. Apple surged over 7% to a new high, boosting tech stocks as Wall Street celebrated it’s significant AI debut.

• The 10-yr UST yields fell by -8.0 bps to 4.39%, while the 2-yr yields lowered by -6.0 bps to 4.81%. Bond yields tumbled due to strong demand in the Treasury’s USD39bn 10-year T-note auction.

• Meanwhile, Wednesday’s US May consumer price report is anticipated to reveal the CPI steady at +3.4% YoY, with the core CPI easing slightly to +3.5% YoY from +3.6% in April.

• In Asia, Japan's producer prices spiked 2.4% YoY in May 2024, accelerating from an upwardly revised 1.1% in April and reaching their highest level since August 2023. This figure exceeded market expectations of a 2% increase, sparking worries about a potential rise in consumer inflation.

• Global bond yields closed lower on Tuesday: the German bund yield closed down by -4.8 bps to 2.62%, while the 10-yr UK gilt yield decreased by -5.4 bps to 4.27%, and the Japanese 10-yr JGB yield fell by -1.7 bps to 1.03%.

Domestic Market Updates

• The Indonesian benchmark series of LCY government bond moved lower on June 11, with the 10-yr benchmark yield rose by +4.87 bps to 7.00%, while the 2-yr yield advanced by +2.17 bps to 6.61%.

• The IDR edged down against the USD on Tuesday (USD/IDR rose by +0.06% to 16,290). The rupiah and other major Asian currencies weakened as Treasury yields rose and the dollar index extended gains for a third session to 105.2.

• In Tuesday’s SUN auction, investors secured IDR22.0tn in winning bids from a total of IDR42.9tn. The series auctioned included new issuances of SPN03240911 and SPN12250612, along with the reopening of FR0101, FR0100, FR0098, FR0097, and FR0102. Notably, FR0100 achieved the highest awarded bid, with a bid-to-cover ratio of 1.60x, securing IDR7.80tn from a total bid of IDR12.45tn.

• Bank Indonesia expects retail sales in May 2024 to rise, with the IPR hitting 233.9, a +4.7% YoY increase. Growth is fueled by the clothing, food, beverages, tobacco, and spare parts and accessories sectors. However, sales are projected to drop 1.0% MoM due to post-Lebaran normalization.

• In Tuesday's Indo-GB series trading, FR0100 and FR101 garnered significant interest in outright transactions, with the highest trade volumes of IDR8.47tn and IDR6.13tn, respectively. Additionally, FR0100, FR101, and FR0102 showed high 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 6.85-7.10% for today.
• Attractive Indo GB series to be traded today : FR0081, FR0064, FR0101, FR0087, FR0100.

Disclaimer On

FR81 FR64 FR101 FR87 FR100

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Fixed Income Report June 12, 2024